Taylor Wimpey (LSE: TW.) shares look a long way away from previous highs. The most recent fall has brought the share price down to just 93p – hard to believe this proud FTSE 250 name is trading for pennies! And it looks especially cheap when compared to its 2024 high of 165p or 2020 high of 218p. Anyone wishing to go even further back might note a share price of nearly £4 in 2008!
Will the Taylor Wimpey share price return to those previous highs? Can the housebuilder restore its former glories? Could there be even more to fall? I recruited my good friend ChatGPT to see what it thought on the matter.
Question: “When will the Taylor Wimpey share price return to its former highs?”
The main thrust of the answer can be summarised in the following bullet points I was provided with:
Base case (most likely)
- 120–130p range: within 1–2 years
Bull case
- 140–170p: possible in 2–4 years
Return to ~190p highs
- Likely long-term (5+ years) — if at all
The main factor suggested was rate cuts, which will bring down the costs of mortgages and increase demand for houses. ChatGPT pointed out that lowering interest rates over the next five years could lead to a “full housing boom cycle” which might lift all housebuilders.
It’s worth bearing in mind that large language models still hallucinate and cannot be relied on. This is just a bit of fun, really. But on the whole, the little chatbot is broadly optimistic. While hitting 200p highs might be years away, the analysis suggests excellent share price growth when considering the stock’s high dividend yield.
The whole
Do those predictions look likely? Analysts think so. Taylor Wimpey boasts some of the most positive forecasts going, with a consensus price target suggesting a 28.3% increase over the next year and a 83.9% increase at the top end.
The latest news on interest rates might pose something of a speed bump, however. With inflation expected to rise because of the conflict in the Middle East, markets are now pricing in a rate hike later this year. Higher rates mean costlier mortgages, which means less demand for the new houses that Taylor Wimpey puts up.
With that said, the firm also offers the best dividend yield of any British housebuilder. The current yield of 8.08% offers the kind of cash in the bank that can brighten up such a rough period. The dividend is still covered, for the time being, although earnings have been dropping and the dividend is expected to dip slightly in the next financial year.
On the whole? There is plenty of scope here for Taylor Wimpey shares to be a good buy for the long run. No one can predict accurately whether and when they will reach previous highs – least of all AI chatbots! – but I think this could be a stock to consider.
