The shortage of new UK homes and government support for the market keeps builder Persimmon (LON:PSN) in the frame for investors, reckons US brokerage Citi.
It rates the company, which was top Footsie gainer yesterday after an upbeat set of 2016 results, as 'neutral' but lifts the price target to £18.31.
Its reasons include the "robust" order book position, which provide it a solid footing into 2017.
Yesterday, the firm said it had sold more homes at higher prices in 2016, with the second half seeing strong customer demand continuing.
Revenues rose 8% to £3.14bn, up from £2.90bn in the year earlier, while sales reservations through the autumn were strong, with Citi noting support from competitive mortgage offers.
Citi analyst Ami Galla said Citi had tweaked its estimates up by around plus 1.8% for 2016 and materially higher for 2017-18 (by around plus 12-13%) assuming stronger margin performance on lower land cost recoveries albeit with muted house price inflation.
"Referendum risks still remain a key challenge but a stronger forward sold position and reliance on strategic land offers some cushion.
"Shortage of housing stock and government's support to Help to Buy continues to be key driver for demand especially at the affordable end as long as the labour market remains healthy," said the analyst.
The shares are up 9% in the year so far so the current valuation looks relatively less compelling, said the broker, hence it remains 'neutral' on the stock.