Berkeley Group Holdings (LSE:BKG) - Share price, News & Analysis

Q: What is the Fair Price of BKG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

BKG (£37.11) is trading below our estimate of [[fair value]] (£143.73)

BKG fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	2/6
Financial Health	4/6
Dividends	0/6

BKG Stock Overview

The Berkeley Group Holdings plc, together with its subsidiaries, engages in the residential-led and mixed-use property development activities in the United Kingdom.

Rewards

Trading at 74.2% below our estimate of its fair value

Revenue is forecast to grow 6.14% per year

Risk Analysis

Earnings are forecast to decline by an average of 1.4% per year for the next 3 years

High level of non-cash earnings

Berkeley Group Holdings Competitors

Taylor Wimpey

LSE:TW.

UK£4.0b

Barratt Developments

LSE:BDEV

UK£4.6b

Persimmon

LSE:PSN

UK£5.9b

Bellway

LSE:BWY

UK£2.6b

Price History & Performance

Summary of all time highs, changes and price drops for Berkeley Group Holdings
Historical stock prices
Current Share Price	UK£37.11
52 Week High	UK£53.84
52 Week Low	UK£34.90
Beta	1.03
1 Month Change	-12.44%
3 Month Change	-5.98%
1 Year Change	-27.85%
3 Year Change	-7.82%
5 Year Change	4.49%
Change since IPO	1,265.39%

Recent News & Updates

Jun 08

Is Now An Opportune Moment To Examine The Berkeley Group Holdings plc (LON:BKG)?

The Berkeley Group Holdings plc ( LON:BKG ), might not be a large cap stock, but it saw a decent share price growth in...

May 17

Returns On Capital At Berkeley Group Holdings (LON:BKG) Paint A Concerning Picture

What trends should we look for it we want to identify stocks that can multiply in value over the long term? In a...

Shareholder Returns

	BKG	GB Consumer Durables	GB Market
7D	-2.7%	-1.9%	-1.1%
1Y	-27.9%	-34.8%	-9.3%

Return vs Industry: BKG exceeded the UK Consumer Durables industry which returned -34.8% over the past year.

Return vs Market: BKG underperformed the UK Market which returned -9.3% over the past year.

Price Volatility

Is BKG's price volatile compared to industry and market?
BKG volatility
BKG Average Weekly Movement	4.1%
Consumer Durables Industry Average Movement	4.5%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.6%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: BKG is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: BKG's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1976	2,705	Rob Perrins	https://www.berkeleygroup.co.uk

The Berkeley Group Holdings plc, together with its subsidiaries, engages in the residential-led and mixed-use property development activities in the United Kingdom. It operates under the Berkeley, St Edward, St George, St James, St Joseph, and St William brand names. The company was founded in 1976 and is headquartered in Cobham, the United Kingdom.

Berkeley Group Holdings Fundamentals Summary

How do Berkeley Group Holdings's earnings and revenue compare to its market cap?
BKG fundamental statistics
Market Cap	UK£4.11b
Earnings (TTM)	UK£482.40m
Revenue (TTM)	UK£2.35b

8.5x

P/E Ratio

1.8x

P/S Ratio

Is BKG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BKG income statement (TTM)
Revenue	UK£2.35b
Cost of Revenue	UK£1.68b
Gross Profit	UK£664.80m
Other Expenses	UK£182.40m
Earnings	UK£482.40m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

Aug 03, 2022

Earnings per share (EPS)	4.36
Gross Margin	28.31%
Net Profit Margin	20.55%
Debt/Equity Ratio	21.0%

How did BKG perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is BKG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BKG?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for BKG. This is calculated by dividing BKG's market cap by their current preferred multiple.
What is BKG's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£4.11b

BKG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.6x
Enterprise Value/EBITDA	7.5x
PEG Ratio	-6.2x

Price to Earnings Ratio vs Peers

How does BKG's PE Ratio compare to its peers?

BKG PE Ratio vs Peers

The above table shows the PE ratio for BKG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	7x
TW. Taylor Wimpey	7.2x	10.6%	UK£4.0b
BDEV Barratt Developments	6.9x	5.6%	UK£4.6b
PSN Persimmon	7.4x	0.3%	UK£5.9b
BWY Bellway	6.4x	8.9%	UK£2.6b
BKG Berkeley Group Holdings	8.5x	-1.4%	UK£4.1b

Forward PE

Price-To-Earnings vs Peers: BKG is expensive based on its Price-To-Earnings Ratio (8.5x) compared to the peer average (7x).

Price to Earnings Ratio vs Industry

How does BKG's PE Ratio compare vs other companies in the GB Consumer Durables Industry?

Price-To-Earnings vs Industry: BKG is good value based on its Price-To-Earnings Ratio (8.5x) compared to the UK Consumer Durables industry average (10.2x)

Price to Earnings Ratio vs Fair Ratio

What is BKG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BKG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.5x
Fair PE Ratio	13.7x

Price-To-Earnings vs Fair Ratio: BKG is good value based on its Price-To-Earnings Ratio (8.5x) compared to the estimated Fair Price-To-Earnings Ratio (13.7x).

Share Price vs Fair Value

What is the Fair Price of BKG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BKG (£37.11) is trading below our estimate of fair value (£143.73)

Significantly Below Fair Value: BKG is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: BKG's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is Berkeley Group Holdings forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-1.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BKG's earnings are forecast to decline over the next 3 years (-1.4% per year).

Earnings vs Market: BKG's earnings are forecast to decline over the next 3 years (-1.4% per year).

High Growth Earnings: BKG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: BKG's revenue (6.1% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: BKG's revenue (6.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BKG's Return on Equity is forecast to be low in 3 years time (12.9%).

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Past Performance

How has Berkeley Group Holdings performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-13.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BKG has a high level of non-cash earnings.

Growing Profit Margin: BKG's current net profit margins (20.5%) are higher than last year (19.2%).

Past Earnings Growth Analysis

Earnings Trend: BKG's earnings have declined by 13.7% per year over the past 5 years.

Accelerating Growth: BKG's earnings growth over the past year (14.1%) exceeds its 5-year average (-13.7% per year).

Earnings vs Industry: BKG earnings growth over the past year (14.1%) underperformed the Consumer Durables industry 120.1%.

Return on Equity

High ROE: BKG's Return on Equity (15.4%) is considered low.

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Financial Health

How is Berkeley Group Holdings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: BKG's short term assets (£6.2B) exceed its short term liabilities (£2.0B).

Long Term Liabilities: BKG's short term assets (£6.2B) exceed its long term liabilities (£1.5B).

Debt to Equity History and Analysis

Debt Level: BKG has more cash than its total debt.

Reducing Debt: BKG's debt to equity ratio has increased from 14% to 21% over the past 5 years.

Debt Coverage: BKG's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: BKG's interest payments on its debt are well covered by EBIT (40.6x coverage).

Balance Sheet

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Dividend

What is Berkeley Group Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

6.24%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate BKG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate BKG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if BKG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if BKG's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: BKG is not paying a notable dividend for the UK market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as BKG has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

5.9yrs

Average management tenure

CEO

Rob Perrins (57 yo)

12.83yrs

Tenure

UK£7,971,000

Compensation

Mr. Rob C. Perrins, BSC (Hons), FCA, has been Chief Executive of The Berkeley Group Holdings plc since September 9, 2009. Mr. Perrins served as Managing Director of The Berkeley Group Holdings plc since Se...

CEO Compensation Analysis

Compensation vs Market: Rob's total compensation ($USD9.49M) is above average for companies of similar size in the UK market ($USD3.18M).

Compensation vs Earnings: Rob's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: BKG's management team is seasoned and experienced (5.9 years average tenure).

Board Members

Experienced Board: BKG's board of directors are considered experienced (8.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: BKG insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/05 00:00
End of Day Share Price	2022/07/05 00:00
Earnings	2022/04/30
Annual Earnings	2022/04/30