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
Solid trading updates from peers lately (Persimmon, Barratt Developments). Decent 4.5% dividend yield. Broker Canaccord (5 Jul) says dividend unpinned. First half results (Feb) beat expectations, helping the shares jump 5%. Low interest rates and government help schemes are supporting the UK housing market.
Risks to Persimmon include slowing UK house price growth. 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. Dividend yield is lower than UK Index peers.
Consensus is Bullish with 64% of brokers saying Buy and only 7% Sell, supported by 100% of broker price targets suggesting upside from current levels. The average broker valuation of 715p is well beyond our short-term target of revisiting the June breakdown level.
Next Event: FY results, 4 Sept; 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 % | 4.6 | -8.8 | -12.1 | -14.9 | -4.2 | 63.8 | 19.3 | 115.5 | 116.8 |
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Prepared by Michael van Dulken, Head of Research