J.P. Morgan named Persimmon its top pick among UK housebuilders, arguing the stock looks cheap based on enterprise value to EBIT metrics. The firm says investors are too focused on traditional price-to-book and P/E measures that are distorted by safety costs and land accounting, creating a valuation gap that favors Persimmon.

JPMorgan calculates Persimmon trades at roughly 10x EV/EBIT, below a sector average near 12x. It also notes smaller building safety liabilities relative to market cap and stronger EBIT margins than peers. The broker sees room for better capital allocation as safety spending winds down, and estimates a potential 30% upside if the stock re-rates to peer multiples.

The call comes as UK builders navigate post-Grenfell remediation costs and a housing market cooling from higher mortgage rates. While Persimmon’s price-to-book looks elevated, JPMorgan argues earnings power and lower provisions justify a premium. Investors will watch upcoming results, build-cost trends, and any policy shifts on planning or first-time buyer demand.