Taylor Wimpey: Improving Sales Activity Conducive to 2024 Outlook Despite Urban Planning Challenges

We remain upbeat on Taylor Wimpey’s prospects in 2024 despite the sales headwind posed by the U.K.’s appreciably slowed urban planning system. Taylor Wimpey updated the market on its performance in late 2023, indicating that homebuyer appetite is improving following tepid market conditions, particularly in mid-2023. Indeed, Taylor Wimpey’s full-year weekly 2023 private sales rate of 0.62 per active outlet implies a late 2023 improvement in sales activity and places further weight behind the notion that the U.K.’s housing market is nearing a recovery phase. Dire housing market conditions prevailed in 2023, which caused home completion volumes to fall and profit margins to contract industrywide. Taylor Wimpey shares continue to appeal, trading at a 22% discount to our unchanged GBX 190 fair value estimate.