Berkeley Group Holdings PLC (LSE:BKG) shares climbed 2.35% to 3,664p as the housebuilder's interim results cheered investors on the whole, with profits falling less than expected.
Broker Stifel said the first-half performance was "impressive", with profits before tax beating consensus by 2% with margins up 60 basis points.
House sales declined 4% to 2,022, which is a bit worse than the consensus forecast of 2,081, with selling prices down 5% due to sales mix, which was slightly worse than expected.
Management left the outlook unchanged for 2026 and 2027.
Berkeley is starting to establish a build-to-rent portfolio, known as Berkeley Living, with two more sites transferred into the group to take the total homes to 1,122.
Stifel says this "should create value as it will achieve better prices by holding units until rents mature" but comes at a short-term cost to returns, with first rental units expected from spring 2026.
Once the portfolio is established, it is expected to be earnings-accretive to the group, "as it allows it to serve a wider customer base and make its customer offering more attractive to planners".
The £132 million of the buyback is front-loading this year's return, compared to only £28 million a year ago, and equates to almost 4% of the shares in issue, while the analyst also flags director buying of shares worth almost £1 million in June and July (at around £38 per share).
The analysts rate the shares a 'hold', "as a meaningful re-rating will need evidence of sustained improvement in London demand and Berkeley's ability to buy viable land and build out new sites.
"These appear to be close to an inflection point, but will need clearer evidence before estimate momentum turns positive."
Analysts from Peel Hunt said they see limited changes to forecasts, although pointed out that the consensus PBT estimate for the 2027 financial year sits at £481 million, with one analyst at £510 million, "comfortably ahead of the current guidance".
The shares have fallen 8% so far this year versus a sector which is down 5%, they noted.
On current forecasts, they noted that the shares are trading on a PE of c.10.7x to April 2026E with a P/TNAV of 0.94x. These ratios drop to 10.3x and 0.87x for April 2027E.