Persimmon in a "sweet spot", says Hargreaves Lansdown

2nd Jul 2014 11:34

Hargreaves Lansdown Stockbrokers said that housebuilder Persimmon "continues to make hay while the sun shines" as it reported a solid second-quarter trading update on Wednesday.Persimmon said that trading during the first half has been "strong" with revenues up 33% at £1.2bn and legal completions for new homes up 28% at 6,408."With accommodative monetary policy underpinning the housing market, interest rates unlikely to rise markedly for now, and the lending practices review leading to sustainable growth in the future, the company is in a sweet spot. Persimmon has capitalised on this environment," said Richard Hunter, Head of Equities at Hargreaves.On a less positive note, Hunted said that there have been concerns about Persimmon's valuation, while the strength of the UK housing market "has been subject to much debate", particularly in the south.Hunter said that Persimmon's stock has had a "subdued year", having risen by just 5% compared to an 8% gain for the wider FTSE 100."To put this in context, however, over the last two years Persimmon's price has more than doubled, leading to the market consensus continuing to settle at a 'hold', albeit a strong one."BC