Broker snap: Bellway's 'high enough for now', says Prime Markets

9th Dec 2011 11:53

Prime Markets says that Bellway's shares are "high enough for now" after significantly outperformed the broader house-building sector since August.Bellway has continued to deliver its strategy of increasing volumes, raising average selling prices through changes in mix and achieving margin growth during the period from 1 August to 30 November 2011. The firm said visitor levels and reservations have been "remarkably resilient", with the latter having increased by some 14% compared to the same period last year. The order book grew from £440m to £458m by the end of the period, with the group securing 73% of its current annual target. Head of dealing at Prime Markets, Richard Curr, said: "As Prime Markets pointed out in our previous notes on housebuilders Barratt and Taylor Wimpey, one could be forgiven for thinking that the recession has passed by the housebuilding industry altogether this year, such is the pace of growth as illustrated by current and future reservations, and the level of investment going into land purchases for new developments. Bellway is no exception."Bellway has comfortably outperformed its rivals in the last few months and Prime Markets says that it has outperformed its own 200-day moving average benchmark of 678p, which "now acts as a new floor for the share price.""With shares currently some way above this level, Prime Markets expects some share price consolidation in the interim, and as such we believe the shares are high enough for now."The broker expects the price to hit 761p (current upper resistance) "before retesting the rising 200-day level" in the next week or so.BC