Persimmon Earnings: Resurgent Summer Home Sales Suggestive of Looming Cyclical Earnings Recovery

Demand conditions for no-moat Persimmon continue to retrace in 2024 from their cyclical nadir a year ago, with recent sales activity instructive of housing market conditions that continue to normalize. Persimmon’s first-half weekly private home sales rate improved 5% year on year during the first half of 2024 to 0.59 homes per active sales outlet (excluding the impact of bulk sales). However, Persimmon’s weekly private home sales rate for the month of July 2024 strengthened 34% year on year (excluding bulk sales). Indeed, the marked improvement in sales activity during the typically quiet summer period points to reemergence of homebuyer confidence in the second half of 2024 and aligns with our expectations for cyclical earnings recovery from 2025 onward.