Taylor Wimpey plc (TW.) Ordinary 1p Shares
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HL comment (15 January 2026)
No recommendation - No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.
Taylor Wimpey’s full-year revenue rose by around 12% to £3.8bn. This was driven by total completion growth of 6% to 11,229 new homes, and average selling prices rising by 5% to £335,000.
The order book declined by £0.1bn to £1.9bn, reflecting a backlog of 6,832 new homes. The net cash position fell by £0.2bn to £0.3bn.
2025’s operating profit is now expected to rise from around £416mn to £420mn, slightly below prior guidance of around £424mn.
In 2026, the group’s operating profit margin is anticipated to fall from 2025’s level, due to weaker pricing and low single-digit build cost inflation.
The shares fell 4.3% in early trading.
Our view
Taylor Wimpey’s full-year results were largely in line with expectations, helped by higher sales volumes and rising house prices over 2025. But markets were disappointed by the outlook for 2026, which points to the potential for weaker-than-expected profits if current trends continue.
Unsurprisingly, there was a pullback in momentum since the half-year mark. Many buyers chose to hold off signing on the dotted line for a new home, waiting for more details about potential tax changes from the UK Budget back in November. With that cloud of uncertainty now cleared, Taylor Wimpey is seeing enquiries return to a similar level as the prior year, so the Spring selling season’s shaping up well.
With a pressing need for new homes in the UK, the long-term demand outlook remains favourable. The issue for 2026 lies in a downward trend in selling prices on the order book, alongside continued cost inflation. Current market forecasts are pencilling in operating profit growth of around 7% to £450mn in 2026. But if recent trends continue, we think this forecast could be too optimistic and wouldn’t rule out some disappointments as the year progresses.
On the flip side, Taylor Wimpey’s significant land bank leaves it relatively well placed to react if demand does pick up. That’s not the full picture though. The landbank’s value can’t be unlocked without the relevant planning permissions. Recent changes to planning permissions have been helpful, but the sector is calling on the UK government to do more to help unlock supply further.
Affordability remains a key issue for buyers to wrestle with, and that’s largely out of Taylor Wimpey’s control. Real wage growth, a competitive mortgage market, and expectations of further rate cuts in 2026 are all helpful. If inflation can be tamed further, there’s scope for rates to come down a little faster and provide a boost to the sector.
The balance sheet remains in good shape, arguably among the strongest in the sector. That supports a healthy prospective dividend yield of 8.7%. Given the current weakness in the valuation, there could be some merit in rebalancing payouts in favour of share buybacks. As always, shareholder returns are not guaranteed.
Taylor Wimpey is well-positioned for the long term, with a strong balance sheet and a solid land pipeline. At current levels, the valuation could offer some long-term upside. However, profit expectations for the current year look a touch too optimistic to us, which could be a drag on near-term sentiment.
Environmental, social and governance (ESG) risk
Most housebuilders are relatively low risk in terms of ESG, particularly for those in Europe. However, there are some environmental risks to consider, from direct emissions to the impact of their buildings on the local ecology. The quality and safety of their buildings is also a key risk.
According to Sustainalytics, Taylor Wimpey’s management of ESG risk is strong.
The group has a strong greenhouse gas reduction programme in place and reports on scope 1, 2 & 3 emissions. There are clear deadlines in place and a renewable energy programme has also been implemented. While the group uses recycled materials, there’s no disclosure of the percentage used.
Taylor Wimpey key facts
Forward price/book ratio (next 12 months): 0.87
Ten year average forward price/book ratio: 1.38
Prospective dividend yield (next 12 months): 8.7%
Ten year average prospective dividend yield: 8.1%
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.
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