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FTSE 250 stocks are under pressure for a third day as the Middle East conflict escalates. Some stocks fared worse than others, however. Take it The Vistry Group (LSE:VTY), which last traded 18% lower at 517p per share.
Investors have been underwhelmed by the manufacturer’s full-year trading report. However the results were in line with the guidance, and the trade increased during the second half of 2025. In hindsight, the drop in Vistry’s share price may seem overwhelming.
So what caused the builder to fall today? And could this represent an attractive dip buying opportunity?
A powerful animal
Vistry is one of the UK’s top housebuilders by volume, and a specialist in the affordable housing sector. It’s been struggling in recent times as high interest rates have halted consumer purchases, and in addition new construction sales have taken a hit, even at lower price points.
In 2025, the company’s adjusted revenue fell by 4% to £4.2bn, as completions fell by 9% to 15,658. However Vistry still managed to increase adjusted pre-tax profit by 2% from the previous year, to £268.8m. This has been due to increased revenue, reflecting fewer offerings from lower-cost southern sites, combined with the company’s strong negotiating power with suppliers.
It is encouraging that the FTSE 250 company started 2026 strongly, with its weekly sales rate per unit of 1.42, up from 0.59 from the same period last year.
Vistry is clearly a tougher beast than in 2024 when it issued a series of profit warnings. So why is the stock price falling?
Digging deep
The problem is that while sales will increase significantly in 2026, the manufacturer has to lower prices so that the top line can grow again. It means Vistry expects profits to remain unchanged from last year’s levels as consumer incentives hit the margins.
In addition, although profits have been collected in the past year, the company’s balance sheet remains very fragile. Total debt fell by 20% in 2025, but remained high at £144.2m as of December. With dividends postponed to 2026, any hopes investors had of a dividend return have been put into the long grass.
Finally, it was announced today that CEO Greg Fitzgerald will step down within the next year. The departure of a 45-year industry veteran adds more uncertainty to a difficult time in the industry.
Can Vistry shares be bought?
Today’s decline means Vistry’s stock trades at a forward price-to-earnings (P/E) ratio of just 7.8 times. That’s well below the 10-year average of 14-15.
Like all housebuilders, it faces significant challenges as the UK economy struggles and unemployment rises. But with interest rates expected to continue falling and the mortgage market heating up, its sales should also find strong support. Its focus on affordable housing means sales can continue to improve even if economic conditions remain tough.
Looking further, I think the firm’s profits could rise significantly from today’s levels, as Britain’s population growth drives demand for new homes. So are Vistry shares a buy now? Although they are not risky, I think they deserve more attention from investors looking for cheap return stocks.
