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MJ Gleeson downgraded after profit warning

Last updated: 11:45 04 Jun 2025 BST, First published: 11:31 04 Jun 2025 BST

MJ Gleeson - M

Shares in MJ Gleeson (LSE:GLE) have fallen 24% across two trading days following a surprise profit warning issued on Tuesday.

The housebuilder said it now expects reduced profit for the financial years ending in June 2025 and June 2026, citing a range of pressures including persistent cost inflation, flat house prices, and planning delays.

The slump prompted RBC Capital Markets to downgrade the stock from 'sector perform' to 'underperform'.

It also cut its 12-month price target from 650p to 425p, saying that the new guidance raises questions about Gleeson’s ability to deliver growth without further sacrificing margin.

In a trading update, Gleeson said that while it remains committed to volume-led growth, operating margins are coming under pressure.

Sales incentives are being used more frequently to drive reservations, while input costs remain elevated and house prices show little sign of rising.

In morning trading on Wednesday, the stock was off 2% at 392p.

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