Financial Trading Blog
Stock of the day 15/02/2016 – Persimmon PLC
After hitting that aforementioned peak in mid-August, capping off a fantastic first-ish half that saw Persimmon surge from £15.76 to £21.50 in around 8 and a half months, the stock entered its choppiest period since the start of the year. The post-Black Monday slump caused Persimmon to sink to £17.72 towards the end of November, hitting a 6 (and a bit) month low in the process, only for things to pick up as 2015 came to a close, with the company trading at £20.29 by the end of the year.
(Source: IT-Finance.com 15/02/2016)
Since the start of 2016, however, things have been far rockier. Tumbling to the £19.20s in the first week of the year, Persimmon was lifted back above £20 following a its latest trading update, the company revealing a 13% increase in revenue to £2.9 billion, helped by an 8% surge in homes built and a 4.5% jump in average selling price (to £199,100).
Yet soon after its post-update rise the company had fallen below the £19 mark, hit by the value-slashing macro-movements that have plagued the global indices since the New Year began. A recovery across the end of January did see Persimmon creep above £20.60 by the start of February, only for the month’s accelerated losses to send it back to a 2 and a half month low of £18.37. Persimmon now sits at a current trading price of £19.25 (IT-Finance.com, 15/02/2016).
In terms of Persimmon’s full year figures next Tuesday focus will likely turn to the company’s performance going forwards, especially with analysts, most recently in the Telegraph, increasingly talking about the potential for a burst housing bubble. In January Persimmon revealed it had seen a 13% rise in forward sales to £1.1 billion, so investors will be looking for the maintenance of, or improvement on, that figure.
Persimmon PLC has a consensus rating of ‘Hold’ with an average target price of £20.15.
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