Harworth Group (LON:HWG) Reaches New 52-Week High - Should You Buy?

Key Points

• Harworth Group reached a new 52-week high of GBX 185, amid takeover interest and optimism about its portfolio of more than 14,000 acres of development land.
• The board rejected Peel’s revised offer, leaving open the possibility of a higher bid or another bidder, but there is currently no binding transaction or guaranteed premium.
• Analysts maintain a “Buy” consensus with an average target of GBX 196.75, although the stock’s high P/E ratio, recent loss and negative margins present valuation risks if takeover expectations fade.

Harworth Group plc (LON:HWG - Get Free Report) reached a new 52-week high during mid-day trading on Monday . The company traded as high as GBX 185 and last traded at GBX 177.60, with a volume of 1093706 shares changing hands. The stock had previously closed at GBX 177.60.

Key Headlines Impacting Harworth Group

Here are the key news stories impacting Harworth Group this week:

• Positive Sentiment: Harworth’s board rejected Peel’s sweetened offer, indicating that management believes the company’s long-term land portfolio and development potential are worth more than the current proposal. The decision could support the investment case if Peel raises its bid or another bidder emerges. Peel's £600m offer for Harworth rejected again
• Positive Sentiment: The takeover debate is focused on the future value of Harworth’s extensive regeneration and development land, rather than only its current earnings. That provides a potential catalyst for a higher valuation, particularly given the company’s portfolio of more than 14,000 acres. Harworth’s bidding war is really about future land value
• Neutral Sentiment: Several insiders bought small parcels of 84 shares at GBX 178 each. The purchases may signal confidence, but their limited value makes them unlikely to materially affect the stock. Harworth Group insider purchase
• Neutral Sentiment: Harworth issued 31,422 new shares after employee option exercises, creating only modest dilution and having little fundamental impact. Harworth issues new shares after employee option exercise
• Negative Sentiment: Investors do not yet have a binding transaction or guaranteed premium. The failed revised bid leaves the outcome uncertain, while Harworth’s recent loss, negative margins and elevated valuation could limit support if takeover expectations fade. Harworth rejects revised bid from Peel Bidco

Analysts Set New Price Targets

A number of research analysts recently weighed in on the stock. Peel Hunt reaffirmed a "buy" rating and issued a GBX 200 target price on shares of Harworth Group in a research report on Wednesday, August 5th. Jefferies Financial Group reiterated a "buy" rating and issued a GBX 170 price target on shares of Harworth Group in a research note on Wednesday, September 9th. Four equities research analysts have rated the stock with a Buy rating, According to data from MarketBeat, the stock presently has an average rating of "Buy" and an average target price of GBX 196.75.

Harworth Group Stock Performance

The stock has a market capitalization of £580.85 million, a P/E ratio of 63.79 and a beta of 0.57. The stock has a 50 day simple moving average of GBX 160.43 and a two-hundred day simple moving average of GBX 146.20. The company has a quick ratio of 1.13, a current ratio of 441.42 and a debt-to-equity ratio of 29.88.

Harworth Group (LON:HWG - Get Free Report) last released its quarterly earnings data on Wednesday, September 9th. The company reported GBX (7.80) EPS for the quarter. Harworth Group had a negative net margin of 20.56% and a negative return on equity of 3.74%. On average, equities analysts forecast that Harworth Group plc will post 15.3212521 EPS for the current fiscal year.

About Harworth Group

Harworth Group plc is a leading sustainable regenerator of land and property for development and investment which owns, develops and manages a portfolio of over 14,000 acres of land on around 100 sites located throughout the North of England and Midlands. The Group specialises in the regeneration of large, complex sites, in particular former industrial sites, into new residential and industrial & logistics developments. Visit www.harworthgroup.com for further information.

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