Persimmon Share Price and Dividend Forecasts: What Investors Need to Know

Despite a 25% share price decline since April 2020, Persimmon shows signs of potential recovery. The company improved its home completions by 7.5% in 2024, building 10,664 homes, and saw an 11.8% increase in Earnings Per Share (EPS). It targets 11,000-11,500 completions for 2025.

Positive market factors include government initiatives to boost construction through planning system overhauls and the Office for Budget Responsibility's (OBR) forecast for increased home building. Upgraded UK growth forecasts from 2026-2029 and anticipated reductions in borrowing costs could further support a housing market recovery.

However, challenges persist. The OBR halved its UK growth forecast for 2025 due to global uncertainty. Inflation has significantly eroded profit margins in the construction sector, with Persimmon's profit per completion dropping from £68,086 in 2022 to £37,050 in 2024. A return to pre-Covid margins seems unlikely in the near term.

Financially, Persimmon maintains a strong position with no debt and a private sales order book valued at £1.15bn. This resilience, combined with positive analyst sentiment (13 out of 18 rate it 'Buy' with an average price target suggesting 27% upside), underpins its potential.

As of early April 2025, Persimmon's dividend yield stood at an attractive 4.9%.

Analysts forecast dividends per share of 60.84p for 2025 and 66.12p for 2026. Based on historical payout ratios, some suggest these could potentially rise to 77.80p and 92.17p respectively.

Key challenges include inflation impacting profit margins (profit per home completion fell 46% between 2022 and 2024), broader economic uncertainty affecting growth forecasts, and the pace of the UK housing market recovery.

Do you think Persimmon's recovery prospects outweigh the market challenges? Let us know your thoughts!

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