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Barratt Redrow stock nears three-year low

Investors consider Barratt Redrow shares as they approach levels not seen since 2022.

July 28, 2025 at 07:19 AM

Near a 3-year low, is now just the right time for investors to consider this FTSE 100 housebuilding giant?

A leading FTSE 100 homebuilder nears a three-year low, presenting potential value for investors.

Investors may find opportunity in FTSE 100 housebuilder

Barratt Redrow, a major player in the FTSE 100 homebuilding sector, is hovering near its lowest stock price in nearly three years. After reaching £5.63 in August, its share price has fallen 33% to around £3.79. This decline comes in light of a recent fiscal year trading update, which revealed home completions fell short of forecasts. Despite these challenges, the company reports a strong increase in forward sales and anticipates near-term profitability. Analysts predict earnings growth of 27.5% annually until 2028, creating a possible investment opportunity for those willing to risk a turbulent housing market.

Key Takeaways

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Barratt Redrow's stock is down 33% from its August high.

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The company reported lower than expected home completions this fiscal year.

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Forward sales increased by 53% year on year, indicating potential growth.

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Earnings growth is projected at 27.5% annually until 2028.

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Their shares may be undervalued by up to 73%, according to DCF analysis.

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Analysts expect dividend payouts to rise significantly in upcoming years.

"The company’s forward sales soared 53% year on year, indicating strong demand."

This highlights the potential growth despite the current stock decline.

"Fears of another surge in cost of living could keep potential buyers sidelined."

A significant risk for investors as it may hinder market recovery.

"Shares may be undervalued by up to 73%, suggesting they could be a bargain."

Investors seeking value might find this analysis compelling.

"A £100m share buyback could support share price gains over time."

This is a positive signal for investors looking for stability.

The steep decline in Barratt Redrow's stock raises significant questions about market perceptions of stability in the housing sector. Investors with a long-term perspective might see this as an opportunity to acquire shares at a lower price, especially given the forecasted earnings and dividends. However, the looming fears surrounding cost of living increases could deter short-term investment, making it essential for potential investors to carefully evaluate their strategies. Past downturns in the housing market remind us that even with strong fundamentals, risks remain.