On Monday, RBC Capital upgraded shares of Barratt Redrow (LON:RDW) PLC (BTRW:LN) (OTC: BTDPY) from Sector Perform to Outperform, setting a price target of GBP5.75. The upgrade reflects the analyst's optimism for the company's prospects in 2025, following a period of regulatory challenges and integration efforts.
Barratt Redrow has been one step removed from the market since February 2024, focusing on its acquisition of Redrow and the subsequent legal discussions with the Competition and Markets Authority (CMA). The firm anticipates that by 2025, these issues will be resolved, allowing Barratt to return to normal business operations.
The analyst highlighted that Barratt Redrow addressed significant landbank issues in 2024 and is now poised for a year of delivery and volume growth. While the integration of Barratt and Redrow is expected to require significant management attention and could encounter operational challenges, the firm's outlook is positive.
RBC Capital forecasts more market tailwinds than headwinds for Barratt Redrow in the coming year. This favorable environment is expected to mitigate any potential difficulties arising from the integration process, providing the company with a cushion against unforeseen obstacles.
The analyst's commentary underscores the expectation that, despite possible bumps in the road during the integration of Barratt and Redrow, the company is well-positioned to navigate through and emerge stronger in the following year.
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