Persimmon PLC (PSN.L): Cost Inflation and Demand Moderation Weigh on Outlook

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Persimmon PLC (PSN.L): Cost Inflation and Demand Moderation Weigh on Outlook

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22 Jun 2026 13:06:09 ET │ 12 pages

Persimmon PLC (PSN.L)

Cost Inflation and Demand Moderation Weigh on Outlook

CITI’S TAKE

Persimmon has started FY26 on strong footing despite a challenging

Buy market outlook, with volumes aligning with guidance due. However,

Price (22 Jun 26 16:30) £10.53 underlying demand is showing signs of softening, characterized by longer

conversion times and weaker enquiry levels, pointing to a more cautious Target price £12.80↓

buyer environment where south facing greater demand challenges than from £16.15

north. Consequently, average selling prices may come under near-term Expected share price return 21.6%

pressure. Build cost increase is a bigger worry going forward. While FY26 Expected dividend yield 5.7%

volumes appear largely de-risked having already secured over half of its Expected total return 27.3%

private home completions and nearly all housing association units for the

Market Cap £3,382M year, the outlook for FY27 is less certain as slowing demand could lead to

US$4,476M weaker order intake. Cost pressure is expected to build through the 2H26

and persist into 2027, creating a potential margin squeeze from the

combined effect of softer pricing and rising build costs.

Ephrem RaviAC

Model Update — We reduce our underlying PBT estimates by c.4% for FY26e and 12% +44-20-7986-2462

for FY27e, reflecting softer demand alongside increasing build cost inflation. The ephrem.ravi@citi.com

group has guided to FY26 completions of 12,000–12,500 units, broadly in line with

Omnath Sinhour estimate of 12,249. The stock trades at 0.94x FY26e P/B on our numbers. We trim

our target price to £12.80 (from £16.15) to reflect lower estimates, maintain Buy. +91-22-4277-5027