Bellway Homes: Revising down FY27 estimates. New PO 2,060p

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Bellway Homes: Revising down FY27 estimates. New PO 2,060p

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Bellway Homes

Revising down FY27 estimates. New PO

2,060p

Reiterate Rating: BUY | PO: 2,060 GBp | Price: 1,925 GBp

Facing a similar headwind on pricing and cost 29 May 2026 Corrected

We believe Bellway is facing the same challenge for UK builders with a more constrained Equity

affordability (therefore muted pricing growth) and a higher cost inflation. We now

assume c.2% volume growth in FY27 (vs previously +6%) and a flattish underlying

Key Changespricing growth (Bellway mentioned an uptick in pricing incentives early this year, before

the full development of Iran conflict). On a more positive note, a better land margin (GBp) Previous Current

(newer land and a shorter land bank year) should help buffer some of the margin hit (we Price Obj. 2,200.00 2,060.00

estimate c.+100bps). Bellway also has a higher weighting towards labour (55%-60% we 2027E Rev (£m) 3,313.9 3,253.6

estimate) where cost inflation should remain at an LSD given muted demand instead of 2028E Rev (£m) 3,638.5 3,497.9

building materials (40%-45%) where inflation should be much higher. See our report 2027E EPS 207.63 169.18

Barratt Redrow: Expectation reset, catalysts light. 2028E EPS 260.39 199.28

We now expect c.9% EBIT margin in FY27 vs 12% before Allison Sun >>

Research Analyst

On the basis of a flattish underlying pricing growth, c.5% build cost inflation, and MLI (UK)

100bps margin help from land, we arrive at c.9% EBIT margin in FY27 and the number +44 20 7996 1052 allison.sun@bofa.com

will grow gradually to 9.5% in FY28. Our EBIT is lowered by 18% on average from 26e-

Arnaud Lehmann >>

28e mostly driven by a lower margin, plus a small decrease on revenue. See our estimate Research Analyst

changes in Exhibit 1.