Up 100%, is there anything holding Vistry Group shares back?

Vistry Group shares had a strong first half of the year, and this strength could be compounded by political developments. Can Vistry go higher?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young mixed-race woman jumping for joy in a park with confetti falling around her

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Vistry Group (LSE:VTY) shares are among the FTSE 100‘s best performers over the past 12 months. The stock has doubled in value.

And on Tuesday (9 July), Vistry Group issued a trading update that further highlighted the company’s positive trajectory.

So, is there anything holding it back? Spoiler alert: not really.

Should you invest £1,000 in BHP right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if BHP made the list?

See the 6 stocks

Created with Highcharts 11.4.3Vistry Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

A positive trading update

Vistry reported strong performance in the first half of 2024, with a strategic focus leading to a projected 10%+ growth in completions for FY24.

The company’s sales rate during the period averaged 1.21. That’s up from 0.86 units in the first half of 2023.

Highlights from the first six months include a 10% rise in adjusted operating profit and an 8% increase in completions.

The Partnerships model — part of the business that delivers affordable/council housing — is outperforming the wider market, and the company expects over 18,000 completions for the year.

Management pointed to a strong forward sales position and new development opportunities. Lower building material costs and reduced net debt further strengthen their outlook.

Moreover, the company said it would be continuing its share buyback programme throughout the second half of the year.

Vistry has committed to returning £1bn of capital to shareholders over the next three years, representing a long-term uplift for the share price.

Labour and housing

Chancellor Rachel Reeves on Monday committed Labour to mandatory housing targets and said she would create a new taskforce “to accelerate stalled housing sites in our country“.

The new government aims to build 1.5m homes by the end of this parliament, including affordable and council homes.

Reeves also announced that the government would prioritise building on brownfield and ‘greybelt’ sites. The plans put Britain’s greenbelt (13% of land) at risk, but should provide developers with access to more attractive development sites.

For housebuilders, this stance signals potential growth opportunities, as supportive government policies could lead to increased demand and streamlined processes.

This also represents a shift from the Conservatives’ approach, which was focused on stimulating demand, and didn’t deliver on the targets promised.

I think it’s important to note here that Vistry could be the best-placed British housebuilder to respond to Labour’s housing objectives, given the size of its Partnerships business.

This is certainly something management has been keen to note.

Could anything hold it back?

The stock isn’t as cheap as it was two years ago. But this reflects the changing industry outlook over the period, from dire to quite optimistic.

One of the biggest concerns will be the valuation data. Vistry is currently trading at 15.4 times forward earnings, and I know that will put off some UK-focused investors.

However, growth forecasts are strong. The forward price-to-earnings (P/E) ratio falls to 12.6 times in 2025 and 11.1 times in 2026.

So, it’s a little more expensive than we’ve been used to, but Vistry is expected to grow earnings at an industry-topping pace.

The forward dividend yield is 3.8%.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

James Fox has positions in Vistry Group Plc. The Motley Fool UK has recommended Vistry Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Around a 1-year high, is there enough value left in Next’s share price to make it worth me buying?

Next’s share price has risen a lot in eight months, but there could still be a lot of value left…

Read more »

Group of young friends toasting each other with beers in a pub
Investing Articles

OMG DYOR but IMO this ‘cool’ FTSE 100 stock offers bangin’ VFM!

Despite being one of the least trendy 50-somethings around, our writer considers how Gen Z could help push this FTSE…

Read more »

Investing Articles

2 cheap FTSE 100 and FTSE 250 growth stocks to consider as stock markets sink

I think these Footsie and FTSE 250 growth shares could be very shrewd buys to consider in the current climate.…

Read more »

Investing Articles

3 shares I’ve bought in the 2025 stock market sell-off

The stock market has experienced a lot of turbulence in recent weeks. Edward Sheldon has been taking advantage and buying…

Read more »

Investing Articles

Investors considering HSBC shares could aim for £8,453 a year in passive income from just £5 a day!

A relatively small daily investment in HSBC shares over several years can produce an extraordinary level of annual passive income…

Read more »

Investing Articles

The Rolls-Royce share price has fallen! Is this the moment investors have been waiting for?

Even the Rolls-Royce share price can't escape current stock market volatility, falling slightly over the last week. Should investors consider…

Read more »

Modern suburban family houses with car on driveway
Investing Articles

Down 59% from its 12-month highs, is this FTSE 250 stock too cheap to ignore?

Shares in FTSE 250 housebuilder Vistry are almost certainly too cheap to ignore. But are they discounted enough to offset…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

As the S&P 500 struggles to recover, here’s what Warren Buffett’s doing

The S&P 500 is fighting to regain its February highs amid ongoing trade tariff uncertainty. Our writer looks to the…

Read more »