Taylor Wimpey Shares Test Support, Analysts See Upside From Here

Taylor Wimpey shares (LON:TW) regained some ground leading into the final trading day of the week, up 2.14% on Thursday to move off fresh 52 week lows, before giving much back this morning. A retest of support at the 100p level could prove to be a setup for a bounce, with a potential break below giving holders fresh cause for concern.

Whilst the share price has fallen 36% over the past year, and remains in a clear downtrend as you can see on the chart below, UBS analyst Marcus Cole has adjusted his outlook, with a price target that remains more than 40% up from here.

The price target was trimmed to 147p from 155p, while the “Buy” rating, signal what is expected to be an upside path from here for the UK homebuilder.

The downtrend that began last autumn has been exacerbated in recent months. On one hand, rising input costs, particularly for essential materials like bricks and cement, have squeezed profit margins; but perhaps more significantly, substantial costs associated with cladding remediation have weighed heavily on the company's financials, pushing Taylor Wimpey into a half-year loss.

We covered the TW earnings print earlier in the week if you would like a more detailed look.

Despite these headwinds, analysts at UBS see potential upside, as evidenced by their maintained “Buy” rating, even with the reduced price target. This suggests a belief that the current depressed levels offer an attractive entry point, despite the sector's persistent challenges.

Earlier this month, there was a host of analyst adjustments to pick through.

Citi analyst Ami Galla lowered the price target to 150p from 157p, maintaining a ‘Buy' rating, following the company's full-year 2024 results, which reported a profit before tax of approximately £419 million. Jefferies also reaffirmed their ‘Buy' rating, setting a target price of 175p.

On the other hand, RBC Capital downgraded Taylor Wimpey to Sector Perform from Outperform with a price target of 135p, citing slower growth in the company's site numbers, whilst Barclays also lowered their price target to 140p from 143p, maintaining an “Equal Weight” rating.

A mixed view from analysts then, yet price targets indicate there remains a bullish undertone. Whether the company can execute, and overcome affordability, and near term pressures is likely to prove pivotal as shares find some support at 100p for now. Will it hold is the question.