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Persimmon
(LSE:PSN)
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Rating:67Neutral
Price Target:
1,254.00 p
▲(13.28% Upside)
Action:Reiterated
Date:08/07/26
The score is led by strong balance-sheet resilience and an attractive income/valuation profile (low leverage, ~5.4% yield, reasonable P/E). Offsetting this are weaker cash-flow conversion (negative free cash flow in 2025) and margin pressure highlighted on the earnings call, while technicals are moderately supportive but not yet long-term bullish (below the 200-day average).
Positive Factors
Volume Growth and Forward Demand
Higher completions, a strong forward order book and reiterated volume guidance indicate improving operational throughput and demand visibility. Sustained delivery growth can support revenue recovery and better utilisation of Persimmon’s regional construction platform.
Negative Factors
Structural Margin Compression
The sustained reduction in gross and net margins shows that profitability has reset materially from earlier years. Build-cost inflation, product mix and incentives may continue limiting earnings conversion even if home volumes recover.
Read all positive and negative factors
Positive Factors
Negative Factors
Volume Growth and Forward Demand
Higher completions, a strong forward order book and reiterated volume guidance indicate improving operational throughput and demand visibility. Sustained delivery growth can support revenue recovery and better utilisation of Persimmon’s regional construction platform.
Read all positive factors
Persimmon (PSN) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£3.67B
Dividend Yield3.47%
Average Volume (3M)1.15M
Price to Earnings (P/E)12.1
Beta (1Y)1.59
Revenue Growth17.38%
EPS Growth18.92%
CountryUK
Employees4,605
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)0.95
Shares Outstanding321,269,900
10 Day Avg. Volume1,225,972
30 Day Avg. Volume1,151,027
Financial Highlights & Ratios
PEG Ratio2.56
Price to Book (P/B)1.20
Price to Sales (P/S)1.16
P/FCF Ratio-362.38
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£2,641.44Price Target Upside138.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)1
Revenue Forecast (FY)£3.96B
Persimmon Business Overview & Revenue Model
Company Description
Operating across the United Kingdom, Persimmon Plc, through its subsidiaries, is a leading residential developer. The company constructs various types of homes, including family properties under the Persimmon Homes brand, executive residences thro...
How the Company Makes Money
Persimmon makes money primarily by building and selling new homes in the UK. Its main revenue stream is the sale of completed residential properties to private buyers and, where applicable, to other channels such as bulk sales; revenue is generall...
Persimmon Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 03, 2027
Earnings Call Sentiment Positive
The call highlights strong volume-led growth, improved operating profit, a robust land and planning pipeline, and operational progress (vertical integration, remediation progress and first-time buyer outperformance). However, there are meaningful near-term margin pressures from embedded build cost inflation, geopolitical-driven incremental costs (GBP 40–50m estimate), slightly higher incentives, some short-term sales softening and ongoing remediation liabilities. Management is confident in mitigating costs through self-help measures and expects to hit full-year volume guidance, while maintaining balance sheet discipline and continuing shareholder returns.Positive Updates
Volume Growth and Completions Increase
New home completions rose 13% year-on-year to 5,189 (H1), and are up 22% versus three years ago; management now expects full-year deliveries to be around 12,500 homes (top end of prior guidance).
Negative Updates
Gross Margin and Margin Headwinds
Gross margin and site-embedded margin pressured by product mix (higher affordable housing share), incentives and build cost inflation. Operating margin reduced from 13.1% to 12.8% and management noted a ~210 bps hit to gross margin from mix, incentives and inflation.
Read all updates
Q2-2026 Updates
Positive
Negative
Volume Growth and Completions Increase
New home completions rose 13% year-on-year to 5,189 (H1), and are up 22% versus three years ago; management now expects full-year deliveries to be around 12,500 homes (top end of prior guidance).
Read all positive updates
Company Guidance
Guidance reiterated that Persimmon expects to deliver around 12,500 homes in 2026 (the top end of prior guidance) with underlying PBT “in line with current expectations/consensus” and year‑end net cash broadly in line with previous guidance (adjusted gearing could be ~20%); the group cites a strong forward book of £1.9bn (private forward book £1.3bn, up 5%, ~8% sold for the year) and an affordable order book of £600m fully secured. Operationally H1 delivered 5,189 completions (up 13%), 4,261 private completions (up 7%), net private weekly sales 205 (up 7%), a five‑week private sales rate of 0.72 including bulk (0.59 excl bulk), blended ASPs +1% (private ASPs +3%) and incentives ~5%; H1 underlying PBT was £170m (up 3%), underlying operating profit £189m (up 10%) with an operating margin of 12.8%, gross profit £267m and housing revenue ~£1.5bn. Balance sheet and other metrics supporting the guidance include net debt of £165m at 30 June, PX stock £168m, owned/controlled plots ~81,000 (strategic/promoter plots ~93,000), 6,123 plots with detailed planning (118% of H1 completions), remediation provision £206m (H1 spend £24m, targeting ~£100m this year), ROCE 11.3%, underlying EPS 38p, interim dividend 20p and a minimum annual capital return policy of 60p.Persimmon Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
88
Very Positive
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.98B | 3.75B | 3.20B | 2.77B | 3.82B | 3.61B |
| Gross Profit | 581.30M | 616.50M | 580.40M | 795.10M | 867.50M | 1.08B |
| EBITDA | 471.70M | 431.10M | 393.00M | 385.30M | 738.20M | 973.50M |
| Net Income | 305.50M | 285.70M | 267.10M | 255.40M | 561.00M | 787.20M |
Balance Sheet | ||||||
| Total Assets | 5.48B | 5.32B | 4.83B | 4.79B | 5.03B | 4.79B |
| Cash, Cash Equivalents and Short-Term Investments | 110.00M | 117.00M | 258.60M | 420.10M | 861.60M | 1.25B |
| Total Debt | 291.80M | 16.80M | 453.60M | 392.70M | 498.00M | 436.90M |
| Total Liabilities | 1.86B | 1.70B | 1.33B | 1.37B | 1.59B | 1.17B |
| Stockholders Equity | 3.61B | 3.61B | 3.51B | 3.42B | 3.44B | 3.63B |
Cash Flow | ||||||
| Free Cash Flow | -157.10M | -12.00M | 52.60M | -166.20M | 371.80M | 763.90M |
| Operating Cash Flow | -130.70M | 28.60M | 84.90M | -129.80M | 402.30M | 784.80M |
| Investing Cash Flow | 38.40M | 26.80M | -45.00M | -42.90M | -29.80M | -18.20M |
| Financing Cash Flow | 79.30M | -197.00M | -201.40M | -268.80M | -757.50M | -754.10M |
Persimmon Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | £3.21B | 10.64 | 8.79% | ― | -4.15% | -10.86% | |
69 Neutral | £2.37B | 16.02 | 4.43% | 3.64% | 13.29% | 7.12% | |
68 Neutral | £844.45M | 6.22 | 4.20% | ― | -4.38% | 100.09% | |
67 Neutral | £3.67B | 12.12 | 8.45% | 5.42% | 17.38% | 18.92% | |
67 Neutral | £4.29B | 20.19 | 2.73% | 5.80% | 28.95% | 43.50% | |
65 Neutral | £2.87B | 11.80 | 5.99% | 9.21% | 9.47% | 193.33% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
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Persimmon Corporate Events
Business Operations and StrategyFinancial Disclosures
Persimmon lifts first-half profits and output as it targets upper-end 2026 growth
Positive
Aug 6, 2026
Persimmon reported a strong first half, increasing home completions by 13% to 5,189 and lifting new housing revenue by the same proportion to £1.48bn, while underlying operating profit rose 10% to £189.1m despite a slight margin decline....
Business Operations and StrategyRegulatory Filings and Compliance
Persimmon Adds Nearly 29,000 Shares to Satisfy Employee Awards
Neutral
Aug 3, 2026
Persimmon has issued and admitted to trading 28,963 new ordinary shares of 10p each during July 2026 to satisfy vested awards under its employee share schemes. The new shares, issued under existing block admissions, are fully fungible with existin...
Regulatory Filings and Compliance
Persimmon Confirms Updated Total Voting Rights
Neutral
Aug 3, 2026
Persimmon has confirmed that its share capital as of 31 July 2026 comprises 321,269,895 ordinary shares of 10p each, with no shares held in treasury. This means the total number of voting rights in the company stands at 321,269,895, providing a cl...
Business Operations and StrategyRegulatory Filings and Compliance
Persimmon Adds 48,838 Shares to Fulfil Employee Awards
Neutral
Jul 1, 2026
Persimmon Plc has issued and admitted to trading 48,838 new ordinary shares of 10p each during June 2026 to satisfy vested awards under its employee share schemes. Following this issuance, the total number of Persimmon ordinary shares admitted to ...
Regulatory Filings and Compliance
Persimmon Confirms Total Voting Rights and Share Capital Structure
Neutral
Jul 1, 2026
Persimmon has confirmed that, as of 30 June 2026, its issued share capital comprises 321,240,932 ordinary shares of 10 pence each, with no shares held in treasury, resulting in an equal number of voting rights. The disclosure clarifies the current...
Other
Persimmon Adds 18,607 Shares to Cover Employee Awards
Neutral
Jun 1, 2026
Persimmon has issued and admitted to trading 18,607 new ordinary shares during May 2026 to satisfy vested awards under its employee share schemes, specifically the 2017 Performance Share Plan. The additional shares, admitted under existing block a...
Regulatory Filings and Compliance
Persimmon Confirms Total Voting Rights at 321.2 Million Shares
Neutral
Jun 1, 2026
Persimmon Plc reported that as of 31 May 2026 its issued share capital comprised 321,192,094 ordinary shares, all carrying voting rights, with no shares held in treasury. This disclosure sets the official total voting rights figure that shareholde...
Regulatory Filings and Compliance
Persimmon CEO Restructures Shareholding Without Changing Overall Stake
Neutral
May 29, 2026
Persimmon has disclosed that Group Chief Executive Dean Finch has restructured part of his equity position, purchasing 60,000 Persimmon shares within his personal pension while selling an equivalent number held in his own name at prices of around ...
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.