Persimmon PLC (LON:PSN) received a higher target price yesterday by Peel Hunt analyst Clyde Lewis, the housebuilder also maintained the company’s ‘hold’ rating from the analysts.
Target price rise reflects increase in land costs
Persimmon PLC (LON:PSN) was raised from 2775p to 2790p by Peel Hunt based on land costs predictions for 2018-2019. The increase also reflects the positive outlook for the company’s performance as highlighted in its first half report issued last week. Peel Hunt also reiterated its previous rating of ‘hold’.
Currently trading on a loss at 2,460.00 GBX −9.00 (0.36%) BST 08:09 30th August, Persimmon PLC is this morning struggling to make gains on the back of a strong GBP.
Renewed investor confidence following earlier Executive pay controversy
The increased target price comes after Persimmon PLC saw a huge drop in share value following outrage over the proposed £100m payment to Chief Executive Jeff Fairburn, which saw investors revolt and share prices drop to GBX 2,414 earlier this year.
Sell rating issued in July
Just last month, the consensus rating for Persimmon PLC (LON:PSN) stock was ‘sell’, with Shore Capital analysts maintaining a rating of ‘fair value’ on the then stock value of 2295p.
Peel Hunt analysts comment on “superior return on equity” as justification for the increase
Peel Hunt analyst Clyde Lewis states: ‘‘In valuation terms the shares are the most expensive in terms of price/net asset value… but this is justified by the superior return on equity. The dividend yield of 9.6% remains very well supported by the group’s balance sheet and ongoing cashflow, and will continue to be a big draw for income investors.” as reported in City Wire.