eyeQ: watch this cheap UK housing market proxy
Experts at eyeQ have used AI and their own smart machine to analyse macro conditions and generate actionable trading signals. Now, it examines a small cap that’s a potential play on the UK construction market.
17th December 2025 10:58
by Huw Roberts from eyeQ
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
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Forterra
Macro Relevance: 59%
Model Value: 194.73p
Fair Value Gap: -8.02% discount to model value
Data correct as at 17 December 2025. Please click glossary for explanation of terms. Long-term strategic model.
Building materials company Forterra (LSE:FORT) is, from an investment perspective, a play on the UK construction market. It makes bricks, blocks and concrete products which it supplies to big UK homebuilders such as Barratt Redrow (LSE:BTRW) and Taylor Wimpey (LSE:TW.).
It’s caught our attention in the wake of today’s lower than expected inflation print. UK CPI fell to its lowest level in eight months this morning and that’s adding to hopes that the Bank of England will cut interest rates tomorrow.
eyeQ’s smart machine has the ability to take UK stocks and rank their sensitivity to inflation expectations. Forterra emerges as one of the names with the biggest negative sensitivity. i.e. it wants inflation to fall. That makes sense - any stock dependent on the housing market will, from a macro perspective, be perceived as a rates play. Lower interest rates lead to lower mortgage costs, which helps with affordability, and is therefore consistent with a healthy housing market.
So, in short, benign inflation helps fuel Bank of England rate cuts, which helps the UK housing market, and the maths shows, among all UK stocks, that Forterra is one of the biggest beneficiaries right now.
It is also noticeable because:
1) Macro is becoming more important - our macro relevance score has risen strongly over the last two months
2) FORT screens as around 8% cheap to broad macro conditions. That fair value gap is big enough to trigger a bullish signal if macro relevance was north of 65%, and the stock was in an official macro regime.
So, no official signal just yet. But a clear flag to watch this proxy play on the UK housing market, which is becoming increasingly macro-driven, screens as cheap, and looks well placed to benefit should inflation pressures continue to ease.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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