DAVY VIEW

Persimmon will continue to achieve higher underlying house price growth than its peers, largely due to its geographic tilt away from London and towards the North of England and the Midlands. The company also has strong embedded gross margins in its landbank and continues to make strides in modern methods of construction. Despite the outperformance year-to-date, the current valuation remains attractive. We upgrade Persimmon to ‘Outperform’ and raise our price target to 1412p.