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Canaccord stays at ‘buy’ on Vistry Group, raises dividend forecasts

Analysts at Canaccord Genuity bumped up their target price on shares of homebuilder Vistry Group following its latest full-year numbers, support measures in the Budget and its management team’s track record.
The group delivered a slightly better-than-expected full year result, having successfully navigated a “difficult” 2020, and was now in “good shape” and set for a “sharp” increase in profits in 2021 “along with a more comfortable balance sheet”.

Furthermore, not only had the year started well, “with the boost from Wednesday’s budget, we have greater confidence in the Group reaching its profit targets this year,” they said.

Indeed, they noted how the group had already secured 64% of its forward sales for 2021.

“Over the last few years, management has propelled Vistry into being a top 5 UK housebuilder and established a leading Partnerships business,” they added.

Canaccord also raised its estimates for the company’s dividend per share in 2021-22 from 45.0p and 47.0p to 50.0p and 60.0p, respectively.

Linked to the above, at the time of Vistry’s full-year results, management had guided towards 2021 average net debt of less than £200m and an improved net cash position.

On the back of all the above, they stood by their ‘buy’ recommendation on the shares while raising their target price from 1,000p to 1,000p.

Their revised target price was based on their 703.0p per share estimate for the firm’s net asset value, excluding goodwill, in calendar year 2021 and a target multiple of approximately 1.34, against a sector average of 1.65 times.

Canaccord’s dividend yield target for the shares was 4.0%.

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