JPMorgan hails "significant" upside at Persimmon

(Sharecast News) - JPMorgan has reiterated an 'overweight' rating for Persimmon, saying that the housebuilder's medium-term targets provide "significant" earnings and valuation potential. The broker kept a positive recommendation on the stock with a 1,520p target price, suggesting further upside from Thursday morning's price of 1,304.5p (-1.1% on the day), despite the shares having outperformed the sector over 2025 so far.

The stock has gained 14% over the year-to-date compared with the wider sector up just 10%, but is still down 5% since the Labour government came into power last summer despite the launch a host of planning changes to support housebuilding.

As such, this still represents an "attractive opportunity for investors", according to JPM analyst Zaim Beekawa.

"As a reminder, Persimmon's mid-term objectives are to achieve 20% operating margins and ROCE; our scenario analysis indicates that, should Persimmon achieve these by 2029 (while continuing to grow the business), we could see earnings upside of 95%, while a simple correlation overlay of historical ROCE to historical P/TNAV, suggests upside of 45% to current valuation levels," Beekawa said.

The analyst also highlighted persimmon's "unappreciated" vertical integration capabilities, such the company using its own bricks, tiles and timber frames to save on build costs, along with the recent launch of its own shared equity products which differentiates it from competitors when it comes to affordability.