Jefferies Names Persimmon as Its Top UK Housebuilding Pick for 2026–27
Brokerage sees 36% upside potential as outlet expansion, land growth and premium brand revival strengthen profit outlook
Global investment bank Jefferies has identified Persimmon as the most attractive opportunity in the UK housebuilding sector, assigning a price target of 1,815p — implying roughly 36% upside from the current 1,335p share price. In its latest research note, Jefferies maintains a “Buy” rating, highlighting Persimmon’s strong land positioning, outlet growth strategy and accelerating returns over the next two years.
Investment Case: Why Persimmon Stands Out
Jefferies’ bullish stance is built on value and future earnings expansion.
The firm notes:
- Shares trade at 1.1x price-to-net tangible asset value, attractive relative to sector peers
- Return on equity is forecast to exceed 13% in 2026
- Growth is underpinned by a strong northern-weighted land bank
- Outlet expansion is expected to accelerate revenue ahead of sector averages
Equity analyst Glynis Johnson notes that Persimmon is guiding for a 5% outlet increase in 2026, with similar growth needed in 2027 to meet its target of 300 total outlets by year-end. That trajectory would position the company firmly ahead of broader industry revenue growth.
Land Pipeline Strengthening into the Late 2020s
Persimmon has ample runway for development, supported by land approvals and planning momentum.
Recent data shows:
- 7% growth in owned plots with planning approval
- 22% increase in plots with detailed or reserved matters consent over the past year
- 50 further development sites have been identified for deployment from 2028 to 2030
This gives Persimmon a sizeable build-out horizon — essential for sustaining revenue growth and margin expansion through the decade.
Premium Brand Charles Church Sees a Revival
A major lever for earnings outperformance is the resurgence of Charles Church, Persimmon’s premium brand.
Management intends to:
- Double completions from Charles Church by year-end 2027
- Double brand representation from 53 sites currently in operation
A stronger high-end product mix is expected to drive pricing power and overall margin improvement.
Revenue, Profit and EPS Outlook to 2027
Jefferies forecasts a strong multi-year growth curve:
|
Fiscal Year
|
Revenue Forecast
|
Pre-Tax Profit
|
EPS Estimate
|
|
2025
|
£3.53bn
|
£438.2m
|
97.35p
|
|
2026
|
£3.82bn
|
£485.8m
|
107.92p
|
|
2027
|
£4.14bn
|
£628.6m
|
139.65p
|
|
|
|
|
|
Forecasts sit 2–3% above market consensus, suggesting the broker sees meaningful upside relative to wider expectations.
Unit completion expectations support growth, with volumes projected to rise from:
- 11,553 homes in 2025
- 12,362 in 2026
- 13,228 in 2027
Average selling prices are expected to climb steadily through the period.
Margin Expansion Central to the Thesis
Jefferies highlights margin recovery as a core driver of upside.
Key margin points include:
- Persimmon’s landbank carries a 29% gross development margin
- Cost optimisation could add 4–8 percentage points to EBIT
- The company is managing out low-margin plots, reducing drag by 2027
Capital allocation flexibility is improving too — Persimmon expects building-safety remediation to be largely complete by end-2026, potentially opening the door to future capital returns. Discussions around dividends and buybacks could accelerate by early 2026.
Final Takeaway
Persimmon’s share price has room to grow, according to Jefferies. A strengthened land pipeline, outlet expansion, a revitalised premium brand and widening margins form the backbone of its bullish outlook. With gearing expected to turn positive by 2027–28, the housebuilder could offer rising investor returns — particularly if execution remains strong.
Sources: (Motley.com, Investing.com)
