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Persimmon PLC PSN

Morningstar Rating
GBX 1,427.00 −14.00 (0.97%)
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Company Report

Persimmon Likely to Benefit From Declining Mortgage Interest Rates as U.K. Inflation Cools

Persimmon is the U.K.’s second largest homebuilder, in terms of both revenue and dwelling completions, operating under a speculative build model that is vertically integrated through the land development, construction, and sales and marketing segments of the value chain. Playing predominantly in the lower-priced segment of the newbuild market, about 50% of Persimmon’s private market sales are to first-homebuyers. Persimmon also has limited exposure to the premium end of the newbuild market via its Charles Church brand that markets higher-priced housing in more premium locations that are built to a higher specification standard.

Price vs Fair Value

PSN is trading at a 534% premium.
Price
GBX 1,441.00
Fair Value
GBX 2,161.00
Uncertainty
High
1-Star Price
GBX 2,669.00
5-Star Price
GBX 3,638.00
Economic Moat
Sjz
Capital Allocation
Ddnmsftx

Bulls Say, Bears Say

Bulls

Underlying housing demand is likely to benefit from the U.K.’s changing demographics. The ongoing ageing of the population is likely to support demand forb new housing over the coming decade as the U.K.'s average household size declines.

Bears

The U.K. government’s annual target of 300,000 new home additions is unlikely to materialise with housing market data not indicative of a material undersupply of housing.

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Trading Information

Previous Close Price
GBX 1,441.00
Day Range
GBX 1,422.121,446.50
52-Week Range
GBX 14.481,506.00
Bid/Ask
GBX 1,426.50 / GBX 1,427.50
Market Cap
GBX 456.32 Bil
Volume/Avg
239,716 / 1.5 Mil

Key Statistics

Price/Earnings (Normalized)
17.42
Price/Sales
1.67
Dividend Yield (Trailing)
1.39%
Dividend Yield (Forward)
1.39%
Total Yield
1.41%

Company Profile

Persimmon is the U.K.’s second largest residential property developer by revenue and dwelling completions, marketing homes under its three brands: Persimmon Homes, Charles Church, and Westbury Partnerships. Persimmon largely caters to the lower-priced segment of the newbuild market, attracting more first-time homebuyers than any of its peer homebuilders. Aligning with the typical business model employed by U.K. homebuilders, Persimmon is a vertically integrated speculative homebuilder.
Sector
Consumer Cyclical
Industry
Residential Construction
Stock Style Box
Mid Core
Total Number of Employees
4,825

Competitors

Valuation

Metric
PSN
BKG
TW.
Price/Earnings (Normalized)
17.4212.1714.80
Price/Book Value
1.351.581.17
Price/Sales
1.672.151.51
Price/Cash Flow
15.6314.5615.39
Price/Earnings
PSN
BKG
TW.

Financial Strength

Metric
PSN
BKG
TW.
Quick Ratio
0.640.640.79
Current Ratio
4.543.575.37
Interest Coverage
23.5523.0818.49
Quick Ratio
PSN
BKG
TW.

Profitability

Metric
PSN
BKG
TW.
Return on Assets (Normalized)
5.43%6.78%5.48%
Return on Equity (Normalized)
7.72%13.98%7.74%
Return on Invested Capital (Normalized)
7.65%11.33%7.47%
Return on Assets
PSN
BKG
TW.
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