This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Positive read-across from peer Barratt Developments’ trading update today. 9% forward dividend yield should be supportive of shares, attracting income seekers. Broker Canaccord (5 Jul) says dividend unpinned. Broker Shore (5 Jul) said latest trading update was more positive than that of rivals, not as exposed too London/South East. The shares have held up since the 5 Jul trading update. Potential for the shares to fill the June gap on chart.
Risks to Persimmon include falling UK house prices, although the company did recently report higher average sale prices. Another UK interest rate hike would make borrowing costs higher for those needing a mortgage. Brexit remains an uncertainty for the resilience of the UK housing market. Rising input costs are a risk.
Consensus is Bullish/Neutral with 33% of brokers saying Buy, 44% Hold and 22% Sell. 90% of broker price targets suggest upside from current levels. A share price bounce could encourage upgrades from the 66% of Neutrals/Sells. The average broker valuation of 2824p is just above our short-term target.
Next Event: H1 results, 21 Aug; Monthly house price data
Latest Broker 12-Month Consensus: 33% Buy, 44% Hold, 22% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | -0.6 | -13.8 | -7.3 | -7.1 | 4.5 | 74.8 | 24.8 | 97.9 | 96.2 |
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Prepared by Michael van Dulken, Head of Research