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Persimmon PLC (GB:PSN)
LSE:PSN

Persimmon (PSN) AI Stock Analysis

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GB:PSN

Persimmon

(LSE:PSN)

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Neutral 58 (OpenAI - 5.2)
Rating:58Neutral
Price Target:
1,319.00 p
▲(18.46% Upside)
Action:DowngradedDate:03/12/26
The score is held back primarily by deteriorated cash flow generation (negative 2025 free cash flow) and reduced profitability versus prior peak years, despite a very strong low-leverage balance sheet. Technical indicators are weak (below key moving averages with negative MACD), while a moderate P/E and ~4.7% dividend yield provide partial support.
Positive Factors
Very low leverage and sizable equity cushion
Extremely low net leverage and a sizable equity base provide durable financial flexibility for a cyclical homebuilder. This cushion supports land acquisition, withstands downturns without forced asset sales, and preserves strategic optionality across market cycles.
Diversified sales channels: private plus affordable/forward sales
A business model mixing private completions with affordable/forward-sale channels reduces exposure to volatile retail demand. Bulk and forward contracts smooth cash and revenue timing, aiding site planning and lowering revenue volatility over the medium term.
Revenue rebound in fiscal 2025
A meaningful revenue recovery reflects either improving market demand or better volume execution across regions. Sustained top-line growth supports utilization of construction capacity and can underpin longer-term margin recovery if cost pressures are addressed.
Negative Factors
Significant gross margin compression
A halving of gross margin over two years indicates structural pressure on pricing or materially higher build/land costs. Lower gross margins reduce operating leverage and limit the firm's ability to absorb cost inflation, making profitability more sensitive to volume swings.
Weak and volatile cash generation; negative free cash flow
Deteriorating and inconsistent cash conversion constrains reinvestment in land and development, pressures dividend sustainability, and increases reliance on external financing. For a capital-intensive builder, negative FCF undermines long-term operational flexibility.
Returns on equity and profitability have materially moderated
A durable reset to lower ROE signals weaker capital efficiency and earnings power. If margins and cash conversion remain depressed, the company may struggle to deliver historical returns, limiting long-term shareholder value creation.

Persimmon (PSN) vs. iShares MSCI United Kingdom ETF (EWC)

Persimmon Business Overview & Revenue Model

Company DescriptionPersimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; executive housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.
How the Company Makes MoneyPersimmon makes money mainly by selling completed new-build homes. Its core revenue stream is private home completions: it acquires land (often through a land bank strategy), secures planning permission, develops sites, builds houses, and then recognizes revenue when homes legally complete (transfer to the buyer), with cash received from buyer deposits and mortgage-funded final payments. A second key revenue stream is sales of homes to affordable housing providers (e.g., housing associations or similar counterparties), typically agreed in bulk or under forward-sale arrangements on developments; these transactions can provide more predictable absorption alongside private sales. Persimmon’s earnings are driven by the number of homes completed and the average selling price achieved, with profitability influenced by build costs, land costs (including the timing and price at which land was acquired), and sales incentives/discounting needed to maintain volumes. Additional contributors can include land and commercial property disposals or other property-related income when the company sells land parcels or non-core assets, but the primary economic engine remains residential development and home sales. Material external factors affecting how Persimmon generates revenue and profit include UK housing demand, mortgage availability and interest rates, planning and regulatory conditions, and any government housing support schemes that influence buyer affordability and market activity.

Persimmon Financial Statement Overview

Summary
Balance sheet strength is a major positive (minimal debt; ~0.005 debt-to-equity and sizable equity buffer), but operating profitability has structurally stepped down (2025 gross margin ~15.4% vs ~28.7% in 2023) and cash conversion is weak with negative free cash flow in 2025.
Income Statement
58
Neutral
Revenue rebounded in 2025 (up 10.8% YoY) after a 2023 decline, but profitability has structurally stepped down versus 2020–2022. Gross margin compressed to ~15.4% in 2025 from ~28.7% in 2023 and ~30.0% in 2021, and net margin fell to ~7.6% (vs ~14.7% in 2022 and ~21.8% in 2021). Net income improved modestly in 2025 vs 2024, but earnings quality is pressured by lower margins.
Balance Sheet
88
Very Positive
The balance sheet is a clear strength with very low leverage in 2025: total debt is minimal and debt-to-equity is ~0.005, down sharply from ~0.13 in 2024. Equity is sizable (~£3.6B) relative to assets (~£5.3B), providing a strong cushion for a cyclical homebuilding business. Returns on equity are positive but have moderated to ~7.9% in 2025 versus the much higher levels seen in 2020–2022, reflecting the profitability reset.
Cash Flow
34
Negative
Cash generation has weakened materially and is volatile. Operating cash flow fell to ~£29M in 2025 from ~£85M in 2024 and was negative in 2023, while free cash flow turned negative in 2025 (~-£12M) after being positive in 2024. Cash conversion is currently weak: operating cash flow is a small fraction of net income and free cash flow is negative relative to earnings, suggesting working-capital/build activity and/or land investment is absorbing cash.
BreakdownDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue3.75B3.20B2.77B3.82B3.61B
Gross Profit576.70M580.40M795.10M867.50M1.08B
EBITDA437.20M393.00M385.30M738.20M973.50M
Net Income285.70M267.10M255.40M561.00M787.20M
Balance Sheet
Total Assets5.32B4.83B4.79B5.03B4.79B
Cash, Cash Equivalents and Short-Term Investments117.00M258.60M420.10M861.60M1.25B
Total Debt16.80M453.60M392.70M498.00M436.90M
Total Liabilities1.70B1.33B1.37B1.59B1.17B
Stockholders Equity3.61B3.51B3.42B3.44B3.63B
Cash Flow
Free Cash Flow-12.00M52.60M-166.20M371.80M763.90M
Operating Cash Flow28.60M84.90M-129.80M402.30M784.80M
Investing Cash Flow26.80M-45.00M-42.90M-29.80M-18.20M
Financing Cash Flow-197.00M-201.40M-268.80M-757.50M-754.10M

Persimmon Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1113.50
Price Trends
50DMA
1394.78
Negative
100DMA
1344.82
Negative
200DMA
1252.39
Negative
Market Momentum
MACD
-81.15
Positive
RSI
21.84
Positive
STOCH
7.73
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:PSN, the sentiment is Negative. The current price of 1113.5 is below the 20-day moving average (MA) of 1319.63, below the 50-day MA of 1394.78, and below the 200-day MA of 1252.39, indicating a bearish trend. The MACD of -81.15 indicates Positive momentum. The RSI at 21.84 is Positive, neither overbought nor oversold. The STOCH value of 7.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:PSN.

Persimmon Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
£3.29B5.4810.20%6.38%-6.44%-0.03%
67
Neutral
£3.61B13.202.73%4.73%33.83%15.11%
65
Neutral
£2.45B18.764.45%2.62%16.91%20.93%
63
Neutral
£3.10B37.902.40%8.95%4.21%-65.57%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
58
Neutral
£3.57B15.227.33%4.54%16.74%-0.16%
54
Neutral
£1.10B15.19-0.31%-0.57%-104.08%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:PSN
Persimmon
1,113.50
-24.61
-2.16%
GB:BTRW
Barratt Redrow
256.00
-148.38
-36.69%
GB:BWY
Bellway
2,102.00
-248.65
-10.58%
GB:BKG
The Berkeley Group Holdings
3,498.00
-130.00
-3.58%
GB:VTY
Vistry Group
345.50
-295.00
-46.06%
GB:TW
Taylor Wimpey
87.60
-16.62
-15.95%

Persimmon Corporate Events

Business Operations and StrategyFinancial Disclosures
Persimmon lifts profits and pipeline as UK housing demand underpins outlook
Positive
Mar 10, 2026

Persimmon reported strong full-year 2025 results, with home completions up 12% to 11,905 and new housing revenue rising 16% to £3.31bn. Underlying operating profit increased 17% to £472.1m, margins edged higher, and all three brands grew, supported by greater mortgage availability, real wage growth, and an expanded outlet base.

The group continued to invest heavily in land, spending £541m and lifting its strategic land pipeline to more than 77,000 potential plots, while maintaining a five-star HBF rating and strong customer scores. Forward sales have risen, early 2026 trading shows higher sales rates and prices, and, barring prolonged disruption from the Iran conflict, Persimmon expects further volume growth this year and is targeting medium-term improvements in margins, returns, and shareholder payouts.

The most recent analyst rating on (GB:PSN) stock is a Hold with a £15.14 price target. To see the full list of analyst forecasts on Persimmon stock, see the GB:PSN Stock Forecast page.

Business Operations and StrategyDividendsFinancial Disclosures
Persimmon posts strong 2025 growth and flags further expansion in 2026
Positive
Mar 10, 2026

Persimmon reported strong full-year 2025 results, with new home completions rising 12% to 11,905 and new housing revenue up 16% to £3.31bn, lifting underlying profit before tax by 13% to £445.6m and operating margin to 14.3%. The group expanded outlets and land holdings, maintained a flat 60p dividend and improved capital returns, supported by enhanced planning capability, brand development and continued investment in its strategic land pipeline and vertically integrated operations.

Trading at the start of 2026 has been robust, with the net private sales rate up 9% year on year and private forward sales 9% higher at £1.25bn, underpinned by better mortgage availability, real wage growth and planning reforms. Management plans to open more than 100 outlets in 2026 and expects further volume and profit growth if the Iran conflict proves short-lived, while warning that increased investment will lift finance costs even as it targets medium-term operating margins and ROCE of 20% and higher shareholder returns.

The most recent analyst rating on (GB:PSN) stock is a Hold with a £15.14 price target. To see the full list of analyst forecasts on Persimmon stock, see the GB:PSN Stock Forecast page.

Regulatory Filings and Compliance
Persimmon Confirms Share Capital and Voting Rights Total
Neutral
Mar 2, 2026

Persimmon plc has confirmed that as of 28 February 2026 its issued share capital comprises 320,747,413 ordinary shares of 10p each, with no shares held in treasury. As a result, the total number of voting rights in the company is 320,747,413, a key reference figure shareholders must use to assess and report any notifiable holdings or changes in their ownership stakes under disclosure rules.

The most recent analyst rating on (GB:PSN) stock is a Hold with a £15.14 price target. To see the full list of analyst forecasts on Persimmon stock, see the GB:PSN Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Persimmon Issues New Shares to Satisfy Employee Awards, Lifts Share Capital to 320.7 Million
Neutral
Feb 18, 2026

Persimmon has issued and allotted 33,372 new ordinary shares of 10p each to satisfy vested awards under its employee share schemes, specifically the 2018 Savings Related Share Option Scheme and the 2017 Performance Share Plan. The new shares, admitted under existing block admissions on the London Stock Exchange, bring Persimmon’s total share capital and voting rights to 320,739,650 ordinary shares as of 17 February 2026, a modest dilution that formalises incentive awards without altering the overall structure of its listed equity.

The additional shares were issued on various dates between 19 January and 17 February 2026 and are fully fungible with existing ordinary shares. This routine administrative step underscores the ongoing use of equity-based compensation at Persimmon, aligning employees’ interests with shareholders while maintaining transparency in the company’s capital base and voting rights for investors.

The most recent analyst rating on (GB:PSN) stock is a Hold with a £1534.00 price target. To see the full list of analyst forecasts on Persimmon stock, see the GB:PSN Stock Forecast page.

Regulatory Filings and Compliance
Persimmon Confirms Share Capital and Voting Rights Total
Neutral
Feb 2, 2026

Persimmon plc has reported that, as of 31 January 2026, its issued share capital comprises 320,711,877 ordinary shares of 10 pence each, with no shares held in treasury, resulting in an identical total of 320,711,877 voting rights. The disclosed figure serves as the reference denominator for shareholders when assessing whether they must notify the company and regulators of any holdings or changes in their interests under relevant transparency rules, reinforcing clarity around Persimmon’s capital structure and governance disclosures.

The most recent analyst rating on (GB:PSN) stock is a Hold with a £1490.00 price target. To see the full list of analyst forecasts on Persimmon stock, see the GB:PSN Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Persimmon Delivers Double-Digit Volume Growth and Higher Prices in Tough 2025 Market
Positive
Jan 13, 2026

Persimmon reported a strong 2025 performance in a difficult housing market, with home completions rising 12% to 11,905 and underlying profit before tax expected at the upper end of market expectations, supported by an expanded outlet base and broad geographic coverage. Average selling prices increased 4% to about £278,000, forward sales rose 2% to £1.17bn despite double-digit completion growth, and the group ended the year with around £116m of net cash after stepping up land investment and progressing building-safety remediation, leaving it well placed for continued outlet and volume growth even as management flags ongoing affordability pressures, softer bulk and registered provider demand, and regulatory cost headwinds in 2026.

The most recent analyst rating on (GB:PSN) stock is a Buy with a £16.13 price target. To see the full list of analyst forecasts on Persimmon stock, see the GB:PSN Stock Forecast page.

Regulatory Filings and Compliance
Persimmon Confirms 320.7 Million Voting Rights at Year-End 2025
Neutral
Jan 2, 2026

Persimmon plc has reported that as of 31 December 2025 its issued share capital comprised 320,681,126 ordinary shares of 10 pence each, with no shares held in treasury, resulting in an equal total of 320,681,126 voting rights. The disclosed voting-rights figure provides the reference denominator for shareholders to assess and report any notifiable holdings or changes in their interests in the company under UK transparency rules.

The most recent analyst rating on (GB:PSN) stock is a Buy with a £16.13 price target. To see the full list of analyst forecasts on Persimmon stock, see the GB:PSN Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Mar 12, 2026