Taylor Wimpey issued a trading update for calendar 2025, with headline completions and average selling price in line with expectations. However, outlook for top-line growth and operating profits slightly disappointed. No changes to fair value estimate of GBX 145. Margin outlook lowered for 2026-2028 due to slower margin recovery and lower selling price growth forecast.

Persimmon preferred over Taylor Wimpey due to minimal exposure to challenging London and Southeast markets. Home completions estimate for 2026 lowered to 10,800. Order book of 6,832 homes below expectations. Bifurcation seen between homebuilders with London/Southeast exposure versus those in the North of England.

Moderate house price growth essential for margin expansion. Full 2026 guidance to be provided on March 5. Input cost inflation and potential house price stagnation in London/Southeast may delay margin recovery for homebuilders.

Read more at Morningstar: Taylor Wimpey: Margin Recovery Taking Longer Than Anticipated, but Shares Are Cheap