Political uncertainty continues to weigh on UK housebuilders but MJ Gleeson (LSE:GLE) can grow faster than its peers and is trading on a "rock-bottom" valuation, according to Stifel.
The broker said the London-listed group, which operates Gleeson Homes and Gleeson Land divisions, is "well positioned for a period of sustained growth".
The Homes division, which builds affordable homes in the North and the Midlands, is expected to benefit from a strong order book, more active sites, improving sales rates, and a capital-light model.
With a lower cost of land than peers as a percentage of unit price, thanks in part to limited competition for land and from other builders, the Homes arm has been able to fund faster profit growth than peers.
The broker said Gleeson’s customers have seen the fastest wage growth and operate in the most affordable markets.
As for the Land division, under new data-led management, it is now adding new sites four times faster than before, the broker said, predicting this could lead to stronger sales from the 2027 financial year.
"Notwithstanding the Budget threat hanging over the sector we find the combination of a plausibly positive outlook and rock-bottom valuation compelling," Stifel said, raising its target price to 480p from 470p and reiterating a 'buy' recommendation.