Barratt Developments PLC (LSE:BDEV) is on course to regrow margins and volumes over the coming years, which UBS analysts expect will prompt a “material” jump in profits by 2030.
Margins should reach 18% by 2030 as volumes climb to 94% of 2022 levels, when interest rates began surging in a blow to the housing sector, according to UBS.
Such a recovery would lead to a pre-tax profit of £1.45 billion come 2030, analysts added, after the housebuilder reported the figure at £170.5 million for 2024 last week.
UBS noted 2025 was set to be a transition year for the FTSE 100-listed developer, with Barratt awaiting final approval on its takeover of Redrow PLC (LSE:RDW), expected next month.
“[House] prices appear broadly stable and the Redrow acquisition integration will start,” UBS said, “we think profitability should now be around the bottom of the cycle”.
Further growth could be fuelled by government plans to ramp up house building, especially if this prompts an acceleration in the planning approval process, according to analysts.
A ‘buy’ rating was reiterated by the bank, alongside a 630p share price target, implying a 27% upside on Monday’s closing value.