Canaccord slightly raises target price on Persimmon ahead of update

Canaccord noted that at the time of Persimmon's interim results, it had highlighted that it saw upside risk to its amended 2020 forecasts.

However, with the construction industry set to continue to operate through the current lockdown and the group having "positioned itself well" to deliver a strong second-half recovery, it opted to increase its 2020 full-year forecasts ahead of the firm's trading update next week.

"We expect the update to be positive and confirm a very good recovery in H2 completions at good margins," said the analysts, who pointed to "an impressive restart" following the UK's first lockdown.

Given recent industry trends and Persimmon's "strong" position, Canaccord now expects an "impressive" first-half profit performance, mirroring management hints that it could even be the group's "strongest" second-half performance in its history.

"There is clearly ongoing macro risk into 2021 but we believe the group continues to have one of the best balance sheets to absorb any macro shock relatively well and the extension of the furlough scheme arguably mitigates near-term macro risk," said Canaccord, which also reiterated its 'buy' rating on the stock.