Persimmon (LON: PSN) share price has been in a strong bearish trend in the past few months as concerns about the UK housing market continue. The shares have crashed to a low of 1,849p, which is about 44% below the highest point in 2021. Other UK housebuilders like Taylor Wimpey and Barratt have also slumped.
Persimmon earnings ahead
Persimmon is one of the top FTSE 100 stocks to watch this week as the company is scheduled to publish its first half results.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
The company’s shares have tumbled sharply in the past few months as concerns about the property sector continues. Recent data by Nationwide and Halifax have shown that the housing sector has started cooling down in the past few months.
The stock’s sell-off accelerated after the company issued a relatively gloomy trading statement in July this year. For example, the firm completed 6,652 homes compared to the 7,406 it completed in the first half of last year.
Its total revenue came in at £1.69 billion while its forward sales were £1.87 billion. At the same time, the company said that margins in the industry were improving, helped by higher pricing and stabilizing cost of goods.
The Persimmon share price has dropped as investors worry about the outlook of the housing sector. For one, the Bank of England (BoE) has hiked interest rates in the past six consecutive months. It hiked by 0.50% this month, the biggest increase in over a decade.
Another concern is that some important costs of doing business are still at elevated levels. Wages have jumped while energy prices and supply constraints of key products have continued. Another issue is that New England’s nutrient neutrality guidance has affected how the company buys plots to build. It has about 1,500 plots affected by the issue.
Persimmon share price forecast
The daily chart shows that the PSN stock price has been in a strong bearish trend in the past few months. In this period, the stock has managed to remain below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved slightly below the neutral point.
Therefore, the shares will likely continue falling as sellers target the year-to-date low of 1,715p. A move above the resistance level at 1,928p will invalidate the bearish view.
Where to buy right now
To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use:
- Etoro, trusted by over 13m users worldwide. Register here >
- Capital.com, simple, easy to use and regulated. Register here >
*Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.
Source: https://invezz.com/news/2022/08/15/persimmon-share-price-pressured-ahead-of-earnings-is-it-a-buy/