In key news on UK stocks, Crest Nicholson Holdings PLC’s (GB:CRST) shares dropped as the homebuilder issued a dim outlook for new builds in FY24. The company expects to build 1,800 to 2,000 houses in FY24, down from the 2,020 built last year. Crest Nicholson blamed a weaker order book and lower reservations in the first two months of FY24 for the dull guidance. However, sales prices are expected to remain stable. CRST stock tumbled up to 10% on Tuesday, ultimately closing at a loss of 4.46%.
Crest Nicholson is a prominent property developer in the UK, operating in the southern half of England.
Details from the Trading Update
Between November 1, 2023, and March 15, 2024, Crest Nicholson’s reservations were in line with its expectations, taking into account the prevailing economic headwinds. Moreover, building costs have overall stabilized and are currently below last year’s level.
The company also disclosed a £15 million provision to rectify construction defects in four of its projects completed before 2019. These sites will require repair work over the next three years. The company has appointed consultants to explore the possibility of additional defects at other sites completed before 2019. CRST will provide additional details on this during its interim results for FY24 in June.
UBS analysts anticipate that CRST stock will respond negatively to any additional repair provisions. Moreover, they believe hiring consultants implies that “there could potentially be further costs identified.” UBS has a Hold rating on CRST shares.
Similarly, RBC analyst Anthony Codling sees the repair provisions as another operational challenge for the company. Last month, Codling confirmed his Sell rating on the stock, predicting a 14% downside.
Is Crest Nicholson a Buy or Sell?
According to TipRanks, CRST stock has a Hold consensus rating based on one Buy, two Hold, and two Sell recommendations. The Crest Nicholson share price target is 209p, which is 3.06% higher than the current trading level.
