PSMMF - Persimmon: Affordable Homes Builder Leveraged To Lower Rates

2024-01-30 20:39:32 ET

Summary

• Despite the challenges, Persimmon ended 2023 on a resilient note.
• Rate cuts are now on the horizon, and that bodes well for a brighter outlook.
• Don't rule out a fiscal boost either, particularly with election season approaching.

Alongside the rest of the UK homebuilding sector, Persimmon Plc (PSMMF), a leading builder within the affordable home niche (via its core ‘Persimmon’ brand) and to a lesser extent in upmarket homes (via its ‘Charles Church’ brand), has rallied strongly towards the end of last year. Fundamentally, it's a timely reminder that the housing sector is ultimately a call on interest rates. So as badly as the stock has been hit by ‘higher for longer’ rates in recent years, the pivot toward rate cuts means a cyclical housing recovery may have only just begun....

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