Persimmon: Volume Outperformance, Profit Beat, and Supportive Market Backdrop Justify Buy Rating

Analyst Peter Ajose-Adeogun of Morgan Stanley maintained a Buy rating on Persimmon, boosting the price target to p1,600.00.

Peter Ajose-Adeogun has given his Buy rating due to a combination of factors that signal improving operational performance and supportive market dynamics for Persimmon. The company delivered completion volumes that were around 4% above the upper end of management’s guidance, translating into a double‑digit year-on-year increase and a clear outperformance versus both Morgan Stanley and market consensus. Underlying profit before tax is expected to land at the top of the market range and ahead of consensus by roughly 3%, while operating margins are tracking broadly in line with prior expectations. In addition, growth in private forward sales and an increase in average sales outlets indicate healthy demand momentum and operational scaling going into the next period.
Looking ahead to 2026, Ajose-Adeogun notes that early trading indicators, including a successful Boxing Day campaign and the easing of mortgage rates, are supportive, even though affordability constraints remain in the background. Management’s guidance suggests Persimmon is well placed to meet current market expectations on both volumes and profits, with company-compiled forecasts for home completions closely aligned with Morgan Stanley’s slightly higher projections. Build cost inflation is expected to be manageable and broadly consistent with prior years, reducing downside risk to margins. Taken together, the volume outperformance, profit beat, resilient margins, improved forward sales position, and constructive outlook underpin Ajose-Adeogun’s view that Persimmon’s shares warrant a Buy recommendation.