Deutsche Bank has upgraded Persimmon PLC (LSE:PSN) from 'hold' to 'buy', citing emerging valuation opportunities after a 40% decline in the housebuilder's share price since mid-October.
The bank’s analysts left their target unchanged at 1,419p - representing a 23% premium to the current share price of 1,149p (up 3% on the day).
Persimmon’s trading update pointed to resilient performance through the year-end, leading Deutsche Bank to raise its 2024 pre-tax profit forecast by 6%.
The revision was driven by stronger-than-expected volumes and average selling prices, even as margins remained flat.
Looking ahead, Deutsche Bank held its 2025 profit expectations steady but trimmed its 2026 forecast by 3.5%, citing a potential return of cost inflation pressures.
While Persimmon’s future returns are expected to remain below pre-pandemic levels, Deutsche Bank sees its current valuation as a compelling entry point for investors, given the firm’s solid near-term performance and discounted share price.