Vistry Group PLC (LSE:VTY)'s shares were up 9% on the back of better-than-expected full-year results - however there is still further to go for the stock, according to investment bank Peel Hunt.
The building group's earnings multiple is 12 times for 2024, falling to 10 times the following year. "We continue to think these multiples offer good value, especially as the share buybacks step up over time," Peel noted, repeating its 'buy' advice and 1,300p price target.
In early afternoon trading the stock was changing hands for 1,219p, up 103p.
Updating the market, Vistry said adjusted profit grew by 47% to £311.8 million, while the buyback is being made in lieu of a final dividend.
It announced plans to increase home construction in 2024, buoyed by a resilient demand for affordable homes, particularly from the private rented sector.
This optimism comes after the company's 2023 profits surpassed market expectations. Despite a challenging year marked by subdued demand and economic uncertainties, early signs of stability in the housing market emerged in 2024, partly due to easing mortgage rates.
Vistry anticipates this trend will bolster open market demand throughout the year. Following a successful £55 million share buyback programme initiated in December, Vistry is set to launch another buyback worth £100 million in April.
With a target to construct over 17,500 units in 2024, up from 16,118 homes last year, Vistry is outperforming the market, contrasting with its competitor Persimmon, which reported a significant profit decline and anticipates continued market challenges.