Persimmon stock rating upgraded by RBC Capital as site openings improve

Investing.com - RBC Capital upgraded Persimmon Plc. (LON:PSN) from Underperform to Sector Perform on Wednesday, raising its price target to GBP13.75 from GBP13.25. The homebuilder, which maintains a solid 6% dividend yield and has consistently paid dividends for 16 consecutive years, currently shows Fair financial health according to InvestingPro metrics.

The upgrade reflects Persimmon’s success in opening new sites and growing its number of active locations, according to RBC Capital’s analysis based on its RBC Elements data.

The homebuilder’s healthy inventory levels were also highlighted as a positive factor, which RBC Capital noted is particularly important at the current point in the housing market cycle.

RBC Capital increased its price-to-book valuation multiple for Persimmon from 1.20x to 1.25x, driving the price target adjustment.

Persimmon shares also trade in the United States through its over-the-counter listing (OTC:PSMMY).

In other recent news, Persimmon Plc . has seen significant activity with analyst upgrades and revised price targets. BofA Securities has upgraded Persimmon’s stock rating from Neutral to Buy, setting a new price target of GBP13.50, citing the company’s attractive valuation and potential benefits from expected interest rate cuts. The firm highlighted Persimmon’s strong position among first-time buyers and its leadership in vertical integration as key factors for potential margin expansion. Meanwhile, Morgan Stanley (NYSE:MS) has also issued an upgrade, placing an Overweight rating on Persimmon with a revised price target of £15.90. Analyst Peter Ajose-Adeogun noted that Persimmon’s focus on affordable homes positions it well for a recovery in volume sales, particularly with improving mortgage rates and affordability. Morgan Stanley’s outlook suggests that Persimmon’s shares are trading at a significant discount compared to their historical average, indicating potential undervaluation. Both firms emphasize the company’s strategic positioning and favorable market conditions as reasons for their positive ratings. These developments come amid close scrutiny of the housing market due to economic pressures.

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