My Taylor Wimpey share price forecast for the second half of 2024

Till the end of June Taylor Wimpey (LSE: TW) The share price has barely changed from the 2024 starting price. This has led to it being behind the FTSE100 by around 7%.

However, developments in the second half of the year have been much more encouraging so far, with the company’s value increasing by almost 11% in just a few weeks.

Will this momentum continue? No one knows for sure. But there are some things investors should think about.

Big goal

The coming to power of the new government has given real estate stocks a real boost, and it is no wonder.

Earlier this month, new finance minister Rachel Reeves set a target of building 1.5 million homes over the next five years. This will be achieved by reforming the country’s planning system and prioritising brownfield sites and neglected ‘grey belt’ areas.

The market reaction to these plans is easy to understand. But achieving this goal is easier said than done. First, there could be significant resistance at the local level.

There is also the question of affordability. Many buildings are useless if there are no buyers. I will come back to that in a moment.

The confirmation of the plans of Keir Starmer and Co. in the “King’s Speech” on July 17 could initially provide a further temporary upturn.

However, I am fairly certain that demand for quality housing in the UK still exceeds supply, which I believe gives companies like Taylor Wimpey solid long-term prospects.

Results to follow!

Also noteworthy is the reaction to the half-year figures due on July 31.

In the last report in April, management stated that the spring sales season was “goes as expected” and that it had seen “sustained market stability“This was supported by good mortgage availability and increasing customer confidence.”

At the time, full-year UK closings were expected to be between 9,500 and 10,000. Any improvement in that range – whether on the same day or later in the year – will be well received. Any reduction could be the opposite, especially with shares already trading at a price-to-earnings (P/E) ratio of 19.

The story goes on

Interest rate cut planned

A third factor that could drive the trend is a reduction in interest rates. Confirmation that the Bank of England believes inflation is under control will provide some relief to people who have struggled to get a mortgage in recent years.

From today’s perspective, it’s a case of waiting and seeing. But a larger-than-expected first cut and/or hints of further cuts in quick succession could prompt analysts to adjust their earnings forecasts. This could make the current share price look cheap over time.

But here too, there is some evidence to suggest that some of these factors have already been taken into account. And it could be unpleasant for the owners if there is another delay.

I am positive

Taking the above into account, I am cautiously optimistic for Taylor Wimpey in 2024. Barring any unpleasant surprises, I tend to believe the second half of the year will be (much) better than the first. I also think shares could outperform the FTSE 100 for the full year by the end of December.

If I didn’t already have Rival persimmonI would seriously consider adding this company to my portfolio.

The post My Taylor Wimpey share price forecast for the second half of 2024 first appeared on The Motley Fool UK.

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Paul Summers owns shares of Persimmon Plc. The Motley Fool UK does not own any of the stocks mentioned. The views expressed in this article on the companies mentioned in this article are those of the author and as such may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.

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