Persimmon: Shares Appeal Despite Little Improvement in Homebuyer Appetite in Early 2024

Persimmon updated investors on its first-quarter trading performance. While homebuyer appetite is improving from its nadir in 2023, Persimmon’s first-quarter net private sales rate—of 0.61 homes per active sales outlet—is little changed from its prior update in March 2024. Consequently, we expect to lower our 2024 estimates given the lack of improvement in homebuyer demand in 2024 year to date and with Persimmon guiding to 10,000-10,500 home completions in 2024 (approximately 8% below our previous forecasts). Nonetheless, Persimmon shares remain attractive, trading at a 43% discount to our GBX 2,300 fair value estimate, which we don’t expect to change materially after downwardly revising our 2024 financial estimates.