UK housebuilder Bellway PLC (LSE:BWY) is expected to place capital efficiency at the centre of its investor communications when it releases full-year results next week, that's according to analysts at Citi.
The American bank's London-based analysts reckon attention is likely to be on how the housebuilder sets out detailed targets tied to its capital allocation framework, and they point to Bellway’s ambition for a more efficient balance sheet, to enable stronger cash generation and returns to shareholders.
“We expect investors’ focus in the upcoming full-year results is likely to be on detailed targets underpinning its capital allocation frameworks as it pursues its ambition for balance sheet efficiency, driving higher cash generation and shareholders,” Citi said.
While the company has previously flagged these ambitions, Citi believes they are not yet fully reflected in the share price due to ongoing sector caution and uncertainty around the timing and scale of shareholder returns.
Despite this, Citi sees “significant scope for a structural re-rating on a relative basis” and reiterated a Buy recommendation with a target price of £30.00.