Taylor Wimpey share price is sinking today after a relatively weak trading update by Persimmon, the biggest homebuilder in the UK. TW shares are trading at 160p, which is lower than the December high of 176.15. At the same time, Persimmon share price has dropped by more than 2%, making it the second-worst performer in the FTSE 100 after Just Eat Takeaway.
The background: Taylor Wimpey is the second-biggest homebuilder in the United Kingdom with a market cap of more than £5.86 billion. It generates more than £4.1 billion in annual revenue. Persimmon is the biggest with a market cap of more than £8.70 billion and a revenue of more than £3.6 billion. Therefore, shares of the two companies tend to move in the same direction.
What happened: Taylor Wimpey share price is falling because of Persimmon’s trading update. The company said that it made more than £3.3 billion or $4.4 billion of revenue in 2020. This was better than what economists were expecting. However, the company warned about the rest of the year as the country continues to deal with the pandemic.
Also, there is the possibility of a slowdown after the end of a tax perk in April. Therefore, TW and Persimmon’s share prices are falling because of this fear.
Taylor Wimpey technical outlook
The daily chart shows that the Taylor Wimpey share price has been moving sideways in the past few months. It is between the 50% and 38.2% Fibonacci retracement level. Also, it is on the same level as the 25-day and 15-day exponential moving averages. Therefore, in the near term, the shares could drop to the lower side of the horizontal channel at 150p.
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TW share price chart
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