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Belway Stock Price Forecast: Financial and Technical Analysis

Belway Stock Price Forecast: Financial and Technical Analysis

  • BWY stock price has shown a recent downtrend after testing its resistance level.
  • The share price of Belway is affected by the housing industry’s downfall.
  • The price faced rejection from its 50 EMA; will it bounce back?

Bellway Plc, founded in 1978, functions as a holding company in the house-building industry, with a focus on constructing and selling new and second-hand homes.

It is currently being led by CEO Jason M. H Thomas Bell and is headquartered in Newcastle in Tyne, United Kingdom.

Beltway PLC’s recent financial highlights.

The total revenue of Belway PLC as per its last annual report is £3.54 Billion which has a positive year-on-year (YOY) growth of 13.3%.

The gross profit Belway PLC as per its last annual report is £787 Million with a  positive year-on-year (YOY) growth of 21%.

The company seems to have very low operating costs, as its Operating profit as per its last annual report is £653 Million with an operating margin of 17.58%

After the net profit negative year of 2021, Belway came up with a net profit positive with a value of £242 Million and a net margin of 12%.

The price-to-earnings ratio of Belway PLC is 11.78, with an earning per share of £189.

The Belway stock has provided a return on Equity of 6.4%.

Belway PLC is very low on debt as per its Debt to equity ratio of 0.04.

Why Belway Stock Price Has Been Falling

With the housing market falling since November 2022 and an average price decline of 2.4%, a big institutional homebuyer named YieldStreet has reportedly reduced its buying levels by 90%. The current situation is causing concerns in the markets all over the world, among homeowners and potential buyers alike. 

However, it is important to note that not all companies in the housing industry are underperforming. For instance, construction companies like Belway PLC are experiencing a fall in their market price, but as we have seen above in the financial highlights, Beltway Co. is not underperforming by huge margins on the fundamental level. This indicates that the correction in Belway stock is a result of fear in the market and nothing more.

Since April 2021, the Belway stock price has exhibited a consistent downward trajectory. Beginning at a value of £2171, the stock experienced a decline that saw it plummet to £1587. This decline in value led to a reduction in the price-to-earnings ratio, making the stock particularly appealing to investors. Consequently, this attractive valuation prompted investors to rally behind the stock, resulting in a subsequent upward trend in its price.

The Belway stock first broke its immediate resistance of £1,902 and rose. However, the bulls seemed to struggle to push the price higher than the support zone, and this struggle came to an end in January 2023 when Belway Stock price broke past its 1st resistance level at £2,084.

Following a brief consolidation phase spanning the levels of £2,084 and £2,266, Belway experienced a notable deviation from this range. This deviation ultimately led to the stock reaching its most recent peak at £2,570. However, it appears that the bullish rally that had been driving the stock’s ascent has currently come to a halt.

Belway Stock Price Forecast: Financial and Technical Analysis
Chart provided by tradingview.com

At the present moment, it’s evident that the Belway stock price has undergone an upward movement, with the bulls successfully surpassing resistance levels, notably marked by a gap-up opening on July 18th. The stock has also faced a test against its immediate resistance and managed to rebound from that point.

Currently, the BWY stock price finds itself positioned within a range defined by various support and resistance levels. Additionally, the indicators provide insights into potential near-future price dynamics.

Support: The initial and immediate support stands at £2,266, which formerly acted as resistance before the gap-up opening. Concurrently, a second support level exists at £1,902.

Resistance: The immediate resistance level resides at £2,226, representing broken support in June 2023. Furthermore, a second resistance is situated at £2,478.

MACD: The MACD chart recently crossed the neutral zero level in late July 2023. Up until August 10th, the Signal line trailed below the MACD line, signifying robust pricing action (a bullish trend). However, both lines have once again exhibited a crossover toward bearish momentum, with the MACD line at 14.16 and the signal line at 25.26.

RSI: The RSI graph mirrors the MACD pattern to some extent. Following the recent rejection the bulls encountered after the immediate support, the RSI line dipped below its neutral level of 50 and currently hovers at 41. This suggests waning buyer strength. Furthermore, the SMA line rests above 57, implying a diminished bullish momentum.

EMAs: The stock price recently dipped below its 50 EMA, potentially signaling unfavorable news for investors, as it denotes a move into bearish territory. Currently, the 50 EMA and 200 EMA stand at £2,164 and £2,186, respectively.

Is it Worth Buying Belway shares?

Considering Belway stock for investment: Based on its decent financial performance and a healthy dividend yield of 6.49%. Belway stock seems to be a favorable choice for long-term investment.

For short-term trading: Traders should closely monitor the prevailing market sentiment within the housing sector, as it could significantly impact the stock’s performance.

Examining the BWY stock chart, it’s evident that Belway Stock price is approaching its immediate demand zone, suggesting a potential bounce-back. However, it’s important to note that the MACD and RSI indicators are signaling weak momentum. Which increases the risk associated with buying at this level. A more prudent buying decision might be waiting for the Belway stock price to sustain above its first resistance level at £2,226.

Conclusion

Bellway Plc is a holding company in the house-building industry, with a focus on constructing and selling new and second-hand homes. The company has reported some decent recent financials. But the stock price has fallen due to the decline of the housing market as a whole. Currently, Belway Stock price is surfing between some supports and resistances. Investors can consider buying and holding the stock while traders have to be conscious until the price breaks past its first resistance.

Technical levels.

Support: £2,084, £1,902

Resistance: £2,226 £2,478

RSI: 41

50 EMA: £2,164

200 EMA: £2,186

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

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