Morningstar Equity Research has lowered their fair value estimate for Taylor Wimpey from GBX 190 to GBX 145, citing moderated near- and medium-term expectations. Despite this, the company still appears attractive at current levels. Homebuilding in the UK is described as highly cyclical, competitive, and capital-intensive with minimal room for competitive advantages. Taylor Wimpey’s sizable landbank is seen as a potential advantage in the upcoming housing cycle. The prior housing cycle inflated homebuilder margins and returns on invested capital, and a gradual recovery is expected. Interest rates, house price growth, demand stimulus, and the planning system have created a favorable environment for homebuilders.

Read more at Morningstar: Taylor Wimpey’s Fair Value Lowered, Shares Still Undervalued