Barratt Redrow (LSE: BTRW) shares are crashing. This is the largest single decline on FTSE 100 over the past three turbulent months, plummeting 38%. Some investors will find this irresistible. Are they crazy?

This is a completely valid strategy to target struggling stocks. I do this regularly. The goal is to pack them at a reduced price and get a higher yield. It’s the same as going to sales. Shares are budget-friendly, so fill your shoes. The rewards can be huge if you do it right. I just checked the broker forecasts for Barratt Redrow and they are impressive.

Eighteen analysts provide one-year share price forecasts and set a consensus estimate of 415p. Today the shares are trading at 244p. If these predictions come true, the stock could rise 70% within a year.

Can this stock really shoot up 70% in 12 months?

It’s a brilliant potential comeback and more. Barratt Redrow is forecast to produce almost 6% of the crop this year. This gives a total return of 76%, which would turn a £9,995 investment (after trading fees) into a whopping £17,591. So should investors jump in with both feet?

First, a word of warning. Broker forecasts are just guesses. Moreover, some of them may have been created before the Iran war, when the prospects were brighter.

Furthermore, just because a company’s shares fell by more than a third, as Barratt Redrow did, doesn’t mean they can’t fall by another third or more. Its shares are down 47% in 12 months and 68% in five years. In fact, their ratings are at a 13-year low. So is Barratt Redrow a poorly run company?

NO. It’s just that home builders are universally mistreated. Compete Persimmon is the second worst player on the FTSE 100 index, however Berkeley Group Holdings, Taylor Wimpey, Vistra Group and others were falling apart.

They have been hit by the cost of living crisis, rising interest rates, the end of Help to Buy, the post-Grenfell fire cladding scandal and rising material costs and employers’ taxes.

2026 was the year in which things were expected to improve, with inflation falling, mortgage rates falling and the economy recovering. This changed when the US bombed Iran.

So is this a brilliant opportunity?

A good company hit by bad news elsewhere – isn’t that a signal to buy? To some extent, yes. The problem is that when a company is at the mercy of broader events, turning things around is not uncomplicated. Fundamentally, Barratt Redrow needs lower inflation and interest rates and a blossoming UK economy where buyers have money in their pockets. Instead, we have a skyrocketing oil price.

It is budget-friendly, with a future price-to-earnings ratio of just 9.7. The yield is excellent, but as my table shows, the dividends have been unstable lately. The interim dividend for 2025 has also been reduced from 5.50p to 5p, a 10% reduction. I’m sure the last one will be trimmed too.

In my opinion, Barratt Redrow shares are an exhilaratingly high-risk, high-reward stock and are worth considering on that score. However, investors must show courage and patience.