Deutsche Bank has reiterated its buy rating on Berkeley Group Holdings PLC (LSE:BKG), forecasting that shareholder returns could drive the share price up 3.3 times over the next decade.
The bank lowered its price target from 5,600p to 4,600p, still 30% above the current level of 3,624p.
Analyst Chris Millington estimates that the upmarket housebuilder could return 150% of its market capitalisation (£5.3bn) over ten years without relying on a housing market recovery or sacrificing earnings.
He expects most of this to come via share buybacks, creating a compounding effect on earnings per share, net tangible assets, and share price.
With Berkeley trading at 1x price-to-net tangible assets, its lowest level since the financial crisis, Deutsche Bank sees a compelling investment opportunity.
In afternoon trading, the stock was off 1.4% at 3,572p.