Broker tips: Persimmon, Shaftesbury Capital, Legal & General

(Sharecast News) - Deutsche Bank lifted Persimmon to 'buy' on Monday, noting that the housebuilder was managing sector headwinds more effectively than peers and continued to deliver resilient returns.

DB said Persimmon's interim results were "robust", with 13% yearonyear volume growth helping offset 210 basis points of grossmargin pressure and supporting 3% growth in pretax profits.

While buildcost inflation was expected to mirror that of the wider sector, Deutsche Bank said management plans to progressively counter this through selfhelp measures and continued topline growth.

To reflect updated guidance, Deutsche trimmed its FY26-28 profit forecasts by 3% to 14%, but now expects broadly flat profits across FY25/27 - a far stronger profile than the declines anticipated elsewhere in the sector - leaving Persimmon generating around 9% return on equity on average between FY26 and FY28, roughly 50% higher than comparable peers.

Deutsche Bank said this level of return supports Persimmon's roughly 1x price/net tangible assets valuation, while giving no credit for any potential market recovery or longerterm profit improvement.

DB did slightly lower its target price on Persimmon from 1,419p to 1,403p, but with the shares having weakened since its previous hold call, the analysys made the move to upgrade the stock to 'buy'.

Analysts at Berenberg upgraded Shaftesbury Capital from 'hold' to 'buy' on Monday, saying the shares now offered "an attractive entry point" relative to the wider UK real estate investment trust sector.

Berenberg noted the stock has been broadly flat yeartodate while the sector was up around 13%, despite Shaftesbury Capital being the only name in its UK real estate coverage expected to deliver a 10% total accounting return in 2026. Berenberg lifted its price target to 166p from 151p.

The German bank, which hiked its target price on the stock to 166p from 151p, said firsthalf results underlined the resilience of valuations, with assets rising 3.3% in the six months to June despite a low 3.7% net initial yield. Strong occupier demand across retail and food & beverage, alongside smaller average lot sizes, continued to support values even as EPRA vacancy nudged up to 4.7%.

A key driver of Shaftesbury's improved outlook was the sharp rise in "building underrent", now sitting at �20.3m and making up almost 10% of annualised rental income, compared with �2m last year. Berenberg said this provides clear visibility on likeforlike rental growth and strengthens confidence in management's 5% to 7% rental growth target.

Berenberg raised EPRA NTA estimates by 3-4% and EPRA EPS forecasts by up to 9% across 2026-30, reflecting strongerthanexpected H1 NTA and modelling of the underrent unwind alongside ongoing ERV growth.

Additionally, Berenberg described Shaftesbury as a potential "AI winner", arguing that structurally deflationary effects from artificial intelligence could push consumer spending toward experienceled, supplyconstrained destinations such as the West End, increasing the scarcity premium for historic real estate.

Citi downgraded Legal & General on Monday to 'sell' from 'neutral' on valuation grounds and cut its price target on the stock to 245p from 251p as it noted the shares were up 19% year-to-date.

The bank said it was cutting its 2026-27 remittances by 4.5% following the first-half results.

"This reflects lower pension buyout volumes underwritten at a reduced IFRS margin offset by higher operating profit from asset management driven by lower CIR, and an additional �100m per annum from asset optimisation actions," it said.

Citi said its core operating profit forecast continues to be broadly in-line with visible alpha consensus in 2026 and 2027.

"Our core operating EPS is expected to grow by 8% YoY compared to the company's communicated 9% outlook," it said, adding that it was making no changes to its 2026 dividend per share estimate.