PG&E Co. (PCG), Priceline (PCLN), Pdi (PDII), D.R. Horton, Inc. (DHI), Digital Realty Trust, Inc. (DLR) and Omega Protein Co. (OME) ratings and price targets.
Bank of America (NYSE:BAC) lowered its price target on PG&E Co. (PCG) to $43.00.
Goldman Sachs (NYSE:GS) initiated coverage on Priceline (PCLN). They placed a “Buy” rating on the company.
Zacks Investment Research downgraded Pdi (PDII) from an “Outperform” rating to a “Neutral” rating.
Stifel Nicolaus downgraded D.R. Horton, Inc. (DHI) from a “Hold” rating to a “Sell” rating.
Goldman Sachs downgraded Digital Realty Trust, Inc. (DLR) from a “Buy” rating to a “Neutral” rating.
Zacks Investment Research downgraded Omega Protein Co. (OME) from a “Neutral” rating to an “Underperform” rating.
Showing posts with label DR Horton. Show all posts
Showing posts with label DR Horton. Show all posts
Wednesday, December 14, 2011
Thursday, September 1, 2011
Century (CENX) (RS) (DROOY) (FUN) (TSO) (TEF) (DHI) (LEN) (MSL) Upgraded
Century Aluminum (NASDAQ:CENX), Reliance Steel (NYSE:RS), DRDGOLD (NASDAQ:DROOY), Cedar Fair (NYSE:FUN), Tesoro (NYSE:TSO), Telefonica S.A. (NYSE:TEF), DR Horton (NYSE:DHI), Lennar (NYSE:LEN) and Midsouth Bancorp (AMEX:MSL) get upgraded by analysts.
Goldman Sachs (NYSE:GS) upgraded Century Aluminum (CENX) from a "Neutral" rating to a "Sell" rating.
Goldman Sachs upgraded Reliance Steel (RS) from a "Neutral" rating to a "Buy" rating.
Morgan Stanley (NYSE:MS) upgraded DRDGOLD (DROOY) from an "Underweight" rating to an "Equal Weight" rating.
Keybanc Capital upgraded Cedar Fair (FUN) from a "Hold" rating to a "Buy" rating.
RBC Capital upgraded Tesoro (TSO) from a "Sector Perform" rating to an "Outperform" rating.
Sandord Bernstein upgraded Telefonica S.A. (TEF) from an "Underperform" rating to a "Market Perform" rating.
UBS (NYSE:UBS) upgraded DR Horton (DHI) from a "Neutral" rating to a "Buy" rating.
UBS upgraded Lennar (LEN) from a "Neutral" rating to a "Buy" rating.
Raymond James (NYSE:RJF) upgraded Midsouth Bancorp (MSL) from a "Market Perform" rating to a "Strong Buy" rating.
Goldman Sachs (NYSE:GS) upgraded Century Aluminum (CENX) from a "Neutral" rating to a "Sell" rating.
Goldman Sachs upgraded Reliance Steel (RS) from a "Neutral" rating to a "Buy" rating.
Morgan Stanley (NYSE:MS) upgraded DRDGOLD (DROOY) from an "Underweight" rating to an "Equal Weight" rating.
Keybanc Capital upgraded Cedar Fair (FUN) from a "Hold" rating to a "Buy" rating.
RBC Capital upgraded Tesoro (TSO) from a "Sector Perform" rating to an "Outperform" rating.
Sandord Bernstein upgraded Telefonica S.A. (TEF) from an "Underperform" rating to a "Market Perform" rating.
UBS (NYSE:UBS) upgraded DR Horton (DHI) from a "Neutral" rating to a "Buy" rating.
UBS upgraded Lennar (LEN) from a "Neutral" rating to a "Buy" rating.
Raymond James (NYSE:RJF) upgraded Midsouth Bancorp (MSL) from a "Market Perform" rating to a "Strong Buy" rating.
Century (CENX) (DHI) (FUN) (LEN) (NUS) (RS) (TSO) Upgraded
Century Aluminum (NASDAQ:CENX), D.R. Horton (NYSE:DHI), Cedar Fair (NYSE:FUN), Lennar (NYSE:LEN), Nu Skin (NYSE:NUS), Reliance Steel (NYSE:RS) and Tesoro Corporation (NYSE:TSO) upgraded by analysts.
Century Aluminum (CENX) was upgraded by Goldman Sachs (NYSE:GS) from a "Sell" rating to a "Neutral" rating. They cited valuation as the catalyst behind the call.
D.R. Horton (DHI) was upgraded by UBS (NYSE:UBS) from a "Neutral" rating to a "Buy" rating. They have a price target of $13 on the company.
Cedar Fair (FUN) was upgraded by KeyBanc from a "Hold" rating to a "Buy" rating. They have a price target of $25 on the company.
Lennar (LEN) was upgraded by UBS from a "Neutral" rating to a "Buy" rating. They have a price target of $21 on the company.
Nu Skin (NUS) was upgraded by Wedbush Securities from a "Neutral" rating to an "Outperform" rating. They have a price target of $48 on the company.
Reliance Steel (RS) was upgraded to a "Buy" rating by Goldman Sachs.
Tesoro Corporation (TSO) was upgraded by RBC Capital Markets from a "Sector Perform" rating to an "Outperform" rating. They raised their price target on the company from $28 to $30.
Century Aluminum (CENX) was upgraded by Goldman Sachs (NYSE:GS) from a "Sell" rating to a "Neutral" rating. They cited valuation as the catalyst behind the call.
D.R. Horton (DHI) was upgraded by UBS (NYSE:UBS) from a "Neutral" rating to a "Buy" rating. They have a price target of $13 on the company.
Cedar Fair (FUN) was upgraded by KeyBanc from a "Hold" rating to a "Buy" rating. They have a price target of $25 on the company.
Lennar (LEN) was upgraded by UBS from a "Neutral" rating to a "Buy" rating. They have a price target of $21 on the company.
Nu Skin (NUS) was upgraded by Wedbush Securities from a "Neutral" rating to an "Outperform" rating. They have a price target of $48 on the company.
Reliance Steel (RS) was upgraded to a "Buy" rating by Goldman Sachs.
Tesoro Corporation (TSO) was upgraded by RBC Capital Markets from a "Sector Perform" rating to an "Outperform" rating. They raised their price target on the company from $28 to $30.
Thursday, July 28, 2011
Linkedin (LNKD) (DHI) (RATE) (PHM) (RYL) (KBH) Get New Coverage
Linkedin Co. (NASDAQ: LNKD), D.R. Horton, Inc. (NYSE: DHI), Bankrate (NASDAQ: RATE), PulteGroup, Inc. (NYSE: PHM), The Ryland Group, Inc. (NYSE: RYL) and KB Home (NYSE: KBH) receive new coverage.
Compass Point initiated coverage on D.R. Horton, Inc. (DHI). They placed a “Neutral” rating and a price target of $12.00 on the company.
Stifel Nicolaus initiated coverage on Bankrate (RATE). They placed a “Buy” rating and a price target of $21.00 on the company.
Compass Point initiated coverage on PulteGroup, Inc. (PHM). They placed a “Neutral” rating and a price target of $8.00 on the company.
Compass Point initiated coverage on The Ryland Group, Inc. (RYL). They placed a “Buy” rating and a price target of $18.00 on the company.
Compass Point initiated coverage on KB Home (NYSE: KBH). They placed a “Sell” rating and a price target of $8.00 on the company.
William Blair initiated coverage on Linkedin Co. (LNKD). They placed a “Market Perform” rating on the company.
Compass Point initiated coverage on D.R. Horton, Inc. (DHI). They placed a “Neutral” rating and a price target of $12.00 on the company.
Stifel Nicolaus initiated coverage on Bankrate (RATE). They placed a “Buy” rating and a price target of $21.00 on the company.
Compass Point initiated coverage on PulteGroup, Inc. (PHM). They placed a “Neutral” rating and a price target of $8.00 on the company.
Compass Point initiated coverage on The Ryland Group, Inc. (RYL). They placed a “Buy” rating and a price target of $18.00 on the company.
Compass Point initiated coverage on KB Home (NYSE: KBH). They placed a “Sell” rating and a price target of $8.00 on the company.
William Blair initiated coverage on Linkedin Co. (LNKD). They placed a “Market Perform” rating on the company.
Wednesday, May 18, 2011
Builders (PHM) (DHI) (TOL) (MDC) (RYL) Continue to Struggle
Pulte Group Inc (NYSE:PHM), D.R. Horton Inc (NYSE:DHI), Toll Brothers Inc (NYSE:TOL), M.D.C. Holdings Inc. (NYSE:MDC) and The Ryland Group Inc (NYSE:RYL) were under pressure Tuesday as new building permits in the U.S. missed estimates by about 40,000, coming in at $550,000.
Housing starts were also a disaster, reaching 520,000, 60,000 below the projected 580,000.
A healthy home construction market is considered to be about 1.2 million homes per year. So far the rate for 2011 is an anemic 523,000 homes per year pace.
In April, new home construction dropped 10.6 percent from March, down 10.6 percent.
PulteGroup closed at $7.61 Tuesday, level with Monday's close. D.R. Horton closed at $11.46, dropping $0.21, or 1.80 percent.
Housing starts were also a disaster, reaching 520,000, 60,000 below the projected 580,000.
A healthy home construction market is considered to be about 1.2 million homes per year. So far the rate for 2011 is an anemic 523,000 homes per year pace.
In April, new home construction dropped 10.6 percent from March, down 10.6 percent.
PulteGroup closed at $7.61 Tuesday, level with Monday's close. D.R. Horton closed at $11.46, dropping $0.21, or 1.80 percent.
Monday, May 16, 2011
Pulte (PHM) (DHI) (TOL) (MDC) (RYL) Pessimistic on Housing Market
According to the National Association of Home Builders, U.S. home builders like D.R. Horton Inc (NYSE:DHI), Toll Brothers Inc (NYSE:TOL), M.D.C. Holdings Inc. (NYSE:MDC), The Ryland Group Inc (NYSE:RYL) and Pulte Group Inc (NYSE:PHM) continue to have a negative outlook on the sector, giving it a 16 grade, with anything below 50 being considered negative.
Added to the usual factors of foreclosed homes, tighter lending standards and higher unemployment, was the return of higher gas prices, which all are weighing on the housing market.
The biggest factor appears to be those who own being concerned over their inability to sell their them at a good price, pressuring them to keep their homes rather than have to possibly pay out to make up the difference in the selling price and what they own on their homes, which in many cases have fallen in price below what they can get for them.
Homes of a strong spring season are fading away, as it hasn't worked out as builders have hoped, and there's little to indicate this will change any time soon.
Builders were trading mixed early in the session, with most of those listed above trading slightly in positive territory.
Added to the usual factors of foreclosed homes, tighter lending standards and higher unemployment, was the return of higher gas prices, which all are weighing on the housing market.
The biggest factor appears to be those who own being concerned over their inability to sell their them at a good price, pressuring them to keep their homes rather than have to possibly pay out to make up the difference in the selling price and what they own on their homes, which in many cases have fallen in price below what they can get for them.
Homes of a strong spring season are fading away, as it hasn't worked out as builders have hoped, and there's little to indicate this will change any time soon.
Builders were trading mixed early in the session, with most of those listed above trading slightly in positive territory.
Monday, May 9, 2011
Ex-Dividend for (DHI) (ECF) (ETR) (FBMS) is May 10
The ex-dividend date for D.R. Horton (NYSE:DHI), Ellsworth Fund Ltd (AMEX:ECF), Entergy Corp (NYSE:ETR) and First Bancshares Inc. (NASDAQ:FBMS) is May 10.
D.R. Horton (DHI) pays a quarterly dividend of $0.04 with a yield of 1.30 percent.
Ellsworth Fund Ltd (ECF) pays a quarterly dividend of $0.06 with a yield of 3.10 percent.
Entergy Corp (NYSE:ETR) pays a quarterly dividend of $0.83 with a yield of 4.80 percent.
First Bancshares Inc. (NASDAQ:FBMS) pays a quarterly dividend of $0.04 with a yield of 1.70 percent.
D.R. Horton (DHI) pays a quarterly dividend of $0.04 with a yield of 1.30 percent.
Ellsworth Fund Ltd (ECF) pays a quarterly dividend of $0.06 with a yield of 3.10 percent.
Entergy Corp (NYSE:ETR) pays a quarterly dividend of $0.83 with a yield of 4.80 percent.
First Bancshares Inc. (NASDAQ:FBMS) pays a quarterly dividend of $0.04 with a yield of 1.70 percent.
Monday, May 2, 2011
Dividend Yields for (NWL) (NKE) (DHI) (FO) (COH)
Indicated dividend yields for Standard & Poor's 500 Index companies Newell Rubbermaid Inc (NWL), NIKE Inc (NKE), DR Horton Inc (DHI), Fortune Brands Inc (FO) and Coach Inc (COH).
These dividend data indicate dividend yields of companies in the Standard & Poor's 500 Index as of Saturday, April 30. The yield is determined by taking the latest declared dividend, annualized and divided by the price of the stock. Payout ratios are calculated based on latest quarterly dividend paid divided by earnings.
Newell Rubbermaid Inc (NWL) has a dividend yield of 1.68 percent on a declared dividend of $0.08. The payout ratio is 19.4 percent.
NIKE Inc (NKE) has a dividend yield of 1.51 percent on a declared dividend of $0.31. The payout ratio is 28.2 percent.
DR Horton Inc (DHI) has a dividend yield of 1.21 percent on a declared dividend of $0.04. The payout ratio is 43.1 percent.
Fortune Brands Inc (FO) has a dividend yield of 1.17 percent on a declared dividend of $0.19. The payout ratio is 34.0 percent.
Coach Inc (COH) has a dividend yield of 1.00 percent on a declared dividend of $0.15. The payout ratio is 23.8 percent.
These dividend data indicate dividend yields of companies in the Standard & Poor's 500 Index as of Saturday, April 30. The yield is determined by taking the latest declared dividend, annualized and divided by the price of the stock. Payout ratios are calculated based on latest quarterly dividend paid divided by earnings.
Newell Rubbermaid Inc (NWL) has a dividend yield of 1.68 percent on a declared dividend of $0.08. The payout ratio is 19.4 percent.
NIKE Inc (NKE) has a dividend yield of 1.51 percent on a declared dividend of $0.31. The payout ratio is 28.2 percent.
DR Horton Inc (DHI) has a dividend yield of 1.21 percent on a declared dividend of $0.04. The payout ratio is 43.1 percent.
Fortune Brands Inc (FO) has a dividend yield of 1.17 percent on a declared dividend of $0.19. The payout ratio is 34.0 percent.
Coach Inc (COH) has a dividend yield of 1.00 percent on a declared dividend of $0.15. The payout ratio is 23.8 percent.
Monday, April 25, 2011
Home Sales Push Pulte (PHM) (DHI) (TOL) (MDC) (RYL) Up
Shares of D.R. Horton Inc (NYSE:DHI), Toll Brothers Inc (NYSE:TOL), M.D.C. Holdings Inc. (NYSE:MDC), The Ryland Group Inc (NYSE:RYL) and Pulte Group Inc (NYSE:PHM) were all up today after reports new home sales rose 11.1 percent from February to March.
Investors shouldn't get too excited though, as sales are still far behind 2010's numbers, coming in at a seasonally adjusted 300,000. Year-over-year, sales are still down 21.9 percent.
Jon Ryding and Conrad DeQuadros of RDQ Economics said, “With the distortions of the homebuyers’ tax credit now well behind us, it appears (looking through the monthly volatility) that new home sales have settled in around 300,000 at an annual rate (the six-month average of sales has been between 291,000 and 313,000 since September 2010). The rebound in March to that 300,000 level suggests a weather-related bounce back from snowstorm-affected levels in February. For 2011 as a whole, we expect that sales (and housing starts) will continue to bounce around recent levels and, given the low share of housing construction in GDP, will have little impact on the overall growth story.”
PulteGroup was trading at $7.84, rising $0.06, or 0.84 percent, as of 1:20 PM EDT. Ryland Group was at $17.58, gaining $0.36, or 2.06 percent. M.D.C. Holdings, Inc. was trading at $28.28, up $0.54, or 1.95 percent. Toll Brothers was at $20.30, up $0.02, or 0.10 percent. D.R. Horton was at $12.16, jumping $0.18, or 1.46 percent.
Investors shouldn't get too excited though, as sales are still far behind 2010's numbers, coming in at a seasonally adjusted 300,000. Year-over-year, sales are still down 21.9 percent.
Jon Ryding and Conrad DeQuadros of RDQ Economics said, “With the distortions of the homebuyers’ tax credit now well behind us, it appears (looking through the monthly volatility) that new home sales have settled in around 300,000 at an annual rate (the six-month average of sales has been between 291,000 and 313,000 since September 2010). The rebound in March to that 300,000 level suggests a weather-related bounce back from snowstorm-affected levels in February. For 2011 as a whole, we expect that sales (and housing starts) will continue to bounce around recent levels and, given the low share of housing construction in GDP, will have little impact on the overall growth story.”
PulteGroup was trading at $7.84, rising $0.06, or 0.84 percent, as of 1:20 PM EDT. Ryland Group was at $17.58, gaining $0.36, or 2.06 percent. M.D.C. Holdings, Inc. was trading at $28.28, up $0.54, or 1.95 percent. Toll Brothers was at $20.30, up $0.02, or 0.10 percent. D.R. Horton was at $12.16, jumping $0.18, or 1.46 percent.
Tuesday, April 19, 2011
Home Builders Toll (TOL) (DHI) (MDC) (RYL) (PHM) Close Up Even with Dismal Outlook
Oddly, investors chose to ignore warnings of a dismal year from home builders and pushed up shares of D.R. Horton Inc (NYSE:DHI), Toll Brothers Inc (NYSE:TOL), M.D.C. Holdings Inc. (NYSE:MDC), The Ryland Group Inc (NYSE:RYL) and Pulte Group Inc (NYSE:PHM) on Monday.
According to The National Association of Home Builders, sentiment for April dropped back to 16 after going up to 17 in March. A reading below 50 indicates a negative sentiment, to show how weak the outlook for 2011 is. It has been five years since the index has been above the 50 mark.
Various negative catalysts including high unemployment, tighter lending standards and bigger requirements for down-payments are keeping many people from buying homes. Also a record number of foreclosures are pushing down home prices, leaving potential buyers concerned that the market has yet to reach bottom.
The index gauging existing conditions dropped one point, to 16, while the recorded foot traffic of prospective buyers increased by a point, to 13. The estimate of single-family home sales over the next six months fell three points, to 23, declining to its lowest level since October.
Some of this is affected by regions and extent of weakness, but overall there's little to be excited about with the home builders.
PulteGroup closed at $7.84 on Monday, gaining $0.02, or 0.26 percent. The Ryland Group ended the session at $16.91, up $0.39, or 2.36 percent. M.D.C. Holdings Inc. closed at $27.26, rising $0.38, or 1.41 percent. Toll Brothers climbed to $20.58, closing at $0.46, increasing 2.29 percent. D.R. Horton ended the day at $11.67, up $0.14, or 1.21 percent.
According to The National Association of Home Builders, sentiment for April dropped back to 16 after going up to 17 in March. A reading below 50 indicates a negative sentiment, to show how weak the outlook for 2011 is. It has been five years since the index has been above the 50 mark.
Various negative catalysts including high unemployment, tighter lending standards and bigger requirements for down-payments are keeping many people from buying homes. Also a record number of foreclosures are pushing down home prices, leaving potential buyers concerned that the market has yet to reach bottom.
The index gauging existing conditions dropped one point, to 16, while the recorded foot traffic of prospective buyers increased by a point, to 13. The estimate of single-family home sales over the next six months fell three points, to 23, declining to its lowest level since October.
Some of this is affected by regions and extent of weakness, but overall there's little to be excited about with the home builders.
PulteGroup closed at $7.84 on Monday, gaining $0.02, or 0.26 percent. The Ryland Group ended the session at $16.91, up $0.39, or 2.36 percent. M.D.C. Holdings Inc. closed at $27.26, rising $0.38, or 1.41 percent. Toll Brothers climbed to $20.58, closing at $0.46, increasing 2.29 percent. D.R. Horton ended the day at $11.67, up $0.14, or 1.21 percent.
Monday, April 4, 2011
Can Toll (TOL) (SPF) (DHI) Honeymoon Last?
If you were to look at a recent chart of the performance of Standard Pacific (NYSE:SPF), DR Horton (NYSE:DHI) and Toll Brothers (NYSE:TOL), it may not appear that they're in a honeymoon period, but when coupled with the pressures related to the foreclosure supply, they've actually caught a break even while their share prices struggle.
It's the same of course with other home builders as well.
But there's no holding back the inevitable wave of growing foreclosures which will hit the market, even with attempts to slow it down by the government, which is only hurting the market, not helping it.
Hurting the market because of homes sitting there without someone in them while the process is grinding slowly along. That means those homes may be unable to be sold once things clear up. That's why the home builders have temporarily caught a break as the number that should be on the market aren't, but that will release, and when it does, they'll not only struggle, but be unable to compete with the much less expensive properties on the market than they can build.
It's questionable whether these companies will be able to survive; or at least the majority of them.
There is also the artificial props of QE2 and so-called Federal stimulus winding down, and that will further exasperate the situation.
It's the same of course with other home builders as well.
But there's no holding back the inevitable wave of growing foreclosures which will hit the market, even with attempts to slow it down by the government, which is only hurting the market, not helping it.
Hurting the market because of homes sitting there without someone in them while the process is grinding slowly along. That means those homes may be unable to be sold once things clear up. That's why the home builders have temporarily caught a break as the number that should be on the market aren't, but that will release, and when it does, they'll not only struggle, but be unable to compete with the much less expensive properties on the market than they can build.
It's questionable whether these companies will be able to survive; or at least the majority of them.
There is also the artificial props of QE2 and so-called Federal stimulus winding down, and that will further exasperate the situation.
Tuesday, March 15, 2011
Homebuilders Up (PHM) (LEN) (TOL) (Hov) (DHI) Up on Dismal Trading Day
In what appears to be investors searching for anything positive to sink their teeth into, shares of homebuilders Pulte (NYSE:PHM), Lennar (NYSE:LEN), Toll Brothers (NYSE:TOL), Hovnanian (NYSE:Hov) and D.R. Horton (NYSE:DHI) are trading up.
The only other positive sector on the day is solar, which is trading up on the nuclear play.
Apparently investors are looking at the hope there will be a decent selling season this spring, the evident reason for pushing up the homebuilder sector. It's doubtful this will be sustainable, but interesting nonetheless.
D.R. Horton was trading at $11.80, gaining $0.15, or 1.29 percent, as of 1:06 PM EDT. Hovnanian was at $3.72, up $0.04, or 1.09 percent. PulteGroup was trading at $6.94, up $0.02, or 0.29 percent. Toll Brothers were at $20.71, gaining $0.07, or 0.34 percent. Lennar was at $19.47, up $0.14, or 0.72 percent.
The only other positive sector on the day is solar, which is trading up on the nuclear play.
Apparently investors are looking at the hope there will be a decent selling season this spring, the evident reason for pushing up the homebuilder sector. It's doubtful this will be sustainable, but interesting nonetheless.
D.R. Horton was trading at $11.80, gaining $0.15, or 1.29 percent, as of 1:06 PM EDT. Hovnanian was at $3.72, up $0.04, or 1.09 percent. PulteGroup was trading at $6.94, up $0.02, or 0.29 percent. Toll Brothers were at $20.71, gaining $0.07, or 0.34 percent. Lennar was at $19.47, up $0.14, or 0.72 percent.
Friday, January 28, 2011
D.R. Horton (NYSE:DHI) Results a Mixed Bag
Results from D.R. Horton (NYSE:DHI) from the last quarter was a mixed bag, some of which still lack clarity to make decisions upon.
Ticonderoga says, "DHI’s results showed some items we liked, some we didn’t, and some we need some clarification on before we judge. Net, we like the Orders trends, don’t like the cost trends as much, like the cash dynamics and like the inventory trends...Revenues were a touch better than expected at $790M, down 30% versus our $769M estimate. Backlog conversion finally dropped down to more sustainable levels at 88% versus our 89% forecast.
"Operating Margin was negative 2.2%, which we believe should be more like breakeven with this volume level excluding any impact from extraordinary spec sales. The Gross Margin was 15.6% versus our 16.8% forecast. This result was a drop of 140 bps sequentially. We need some clarity here, as we do not yet know what the primary driver was. If the margin suffered because DHI cleared out 400 specs, we will take it. If it’s meaningfully driven by incentives, we are disappointed with the level. SG&A was 15.5% versus our 12.2% forecast. Bluntly, we made a big gaffe with our estimate. Last quarter, SG&A was higher, on higher revenues, than on our forecast for this quarter. We have no excuse for our forecast. However, DHI’s SG&A as a percentage of sales was still too high, as it likely should have been 100 bps or more lower, given the revenue stream."
Ticonderoga maintains 'Buy' rating on D.R. Horton (DHI), which closed Wednesday at $12.81, down $0.43, or 3.25 percent. Ticonderoga has a price target of $13 on D.R. Horton.
Ticonderoga says, "DHI’s results showed some items we liked, some we didn’t, and some we need some clarification on before we judge. Net, we like the Orders trends, don’t like the cost trends as much, like the cash dynamics and like the inventory trends...Revenues were a touch better than expected at $790M, down 30% versus our $769M estimate. Backlog conversion finally dropped down to more sustainable levels at 88% versus our 89% forecast.
"Operating Margin was negative 2.2%, which we believe should be more like breakeven with this volume level excluding any impact from extraordinary spec sales. The Gross Margin was 15.6% versus our 16.8% forecast. This result was a drop of 140 bps sequentially. We need some clarity here, as we do not yet know what the primary driver was. If the margin suffered because DHI cleared out 400 specs, we will take it. If it’s meaningfully driven by incentives, we are disappointed with the level. SG&A was 15.5% versus our 12.2% forecast. Bluntly, we made a big gaffe with our estimate. Last quarter, SG&A was higher, on higher revenues, than on our forecast for this quarter. We have no excuse for our forecast. However, DHI’s SG&A as a percentage of sales was still too high, as it likely should have been 100 bps or more lower, given the revenue stream."
Ticonderoga maintains 'Buy' rating on D.R. Horton (DHI), which closed Wednesday at $12.81, down $0.43, or 3.25 percent. Ticonderoga has a price target of $13 on D.R. Horton.
Wednesday, January 19, 2011
D.R. Horton (NYSE:DHI), Lennar (NYSE:LEN), KB Home (NYSE:KBH), Other Homebuilders Reviewed by Ticonderoga
Noting the upcoming earnings season for homebuilders, Ticonderoga has reviewed a number of companies, including their Buy-rated D.R. Horton (NYSE:DHI), Lennar (NYSE:LEN) and KB Home (NYSE:KBH).
Ticonderoga says, "With the fourth quarter earnings season ramping next week for the homebuilders, we want to step back and review our calendar 2011 outlook for the group. Given a positive 19.3% performance in December compared with a 6.5% increase in the S&P, followed by a 13.3% increase to-date this month, investors are decidedly looking optimistically toward the builders’ prospects for 2011 and, more specifically, the impending spring selling season, which starts in earnest in February. Improved valuations, not improved fundamentals, have driven the rise in the equities, which now trade at 1.3x (ex-NVR) our favored present valued adjusted BV multiple and at 1.08x (ex-NVR) historically comparable book values, which adds back DTA valuation allowances. Absent improved fundamentals in February, March and April versus our expectations, we believe the equities have become over-extended in the near term, although still reasonably valued longer term, as the economy starts its recovery. A sustained march toward the group’s 1.6x historical BV measure will likely not occur without a healthier buyer demand scenario.
"Entering this year, we have 3 Buy, 1 Sell and 5 Neutral rated equities in our homebuilder coverage. Additionally, we have one paired trade in place. With respect to our Buy-rated names—D.R. Horton (NYSE: DHI), Lennar (NYSE: LEN) and KB Home (NYSE: KBH)- KBH is our top pick at the moment given its significant cost reduction progress and its discount valuation to the group (7% and 26%, respectively, on book value metrics above). While the first half of 2011 will likely prove challenging for the company given its low backlog, we continue to project solid profitability in 2011 and 2012. In our opinion, this should allow the equity to close the valuation gap versus its peers. Similarly, we believe risk appetite within the space will increase this year, with KBH best positioned, outside of the speculative bankruptcy risk builders, to capitalize on this shift in investor sentiment. MDC (NYSE: MDC), our lone Sell-rated equity, appears set to fundamentally underperform the group by a wide margin, in our opinion, given its industry-high cost structure. Other than a much lower valuation, we need to see a useful reduction in the company’s SG&A expense ratio prior to giving consideration to a more constructive rating. While shorting any builder may be difficult in this somewhat euphoric environment, we believe MDC has the fundamental headwinds and stout valuation to pair up with virtually any other builder we cover. For our specific paired trade, we are long KBH and short PulteGroup (NYSE: PHM). Given the above-mentioned discount valuation to the group for KBH and a premium valuation for PHM, we believe investors will be rewarded as the respective gap for each dissipates driven by improved fundamentals at KBH and continued struggles for PHM as it attempts to capitalize on its acquisition of CTX."
D.R. Horton (DHI) was trading at $13.00, down $0.33, or 2.48 percent, as of 11:56 AM EST. Lennar (LEN) was at $19.99, down $0.50, or 2.44 percent., KB Home (KBH) was at $15.14, down $0.32, or 2.07 percent.
Ticonderoga says, "With the fourth quarter earnings season ramping next week for the homebuilders, we want to step back and review our calendar 2011 outlook for the group. Given a positive 19.3% performance in December compared with a 6.5% increase in the S&P, followed by a 13.3% increase to-date this month, investors are decidedly looking optimistically toward the builders’ prospects for 2011 and, more specifically, the impending spring selling season, which starts in earnest in February. Improved valuations, not improved fundamentals, have driven the rise in the equities, which now trade at 1.3x (ex-NVR) our favored present valued adjusted BV multiple and at 1.08x (ex-NVR) historically comparable book values, which adds back DTA valuation allowances. Absent improved fundamentals in February, March and April versus our expectations, we believe the equities have become over-extended in the near term, although still reasonably valued longer term, as the economy starts its recovery. A sustained march toward the group’s 1.6x historical BV measure will likely not occur without a healthier buyer demand scenario.
"Entering this year, we have 3 Buy, 1 Sell and 5 Neutral rated equities in our homebuilder coverage. Additionally, we have one paired trade in place. With respect to our Buy-rated names—D.R. Horton (NYSE: DHI), Lennar (NYSE: LEN) and KB Home (NYSE: KBH)- KBH is our top pick at the moment given its significant cost reduction progress and its discount valuation to the group (7% and 26%, respectively, on book value metrics above). While the first half of 2011 will likely prove challenging for the company given its low backlog, we continue to project solid profitability in 2011 and 2012. In our opinion, this should allow the equity to close the valuation gap versus its peers. Similarly, we believe risk appetite within the space will increase this year, with KBH best positioned, outside of the speculative bankruptcy risk builders, to capitalize on this shift in investor sentiment. MDC (NYSE: MDC), our lone Sell-rated equity, appears set to fundamentally underperform the group by a wide margin, in our opinion, given its industry-high cost structure. Other than a much lower valuation, we need to see a useful reduction in the company’s SG&A expense ratio prior to giving consideration to a more constructive rating. While shorting any builder may be difficult in this somewhat euphoric environment, we believe MDC has the fundamental headwinds and stout valuation to pair up with virtually any other builder we cover. For our specific paired trade, we are long KBH and short PulteGroup (NYSE: PHM). Given the above-mentioned discount valuation to the group for KBH and a premium valuation for PHM, we believe investors will be rewarded as the respective gap for each dissipates driven by improved fundamentals at KBH and continued struggles for PHM as it attempts to capitalize on its acquisition of CTX."
D.R. Horton (DHI) was trading at $13.00, down $0.33, or 2.48 percent, as of 11:56 AM EST. Lennar (LEN) was at $19.99, down $0.50, or 2.44 percent., KB Home (KBH) was at $15.14, down $0.32, or 2.07 percent.
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