PulteGroup (PHM) Downgraded to “Hold” at Zacks Investment Research

PulteGroup (NYSE:PHM) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and investors on Friday.

According to Zacks, “PulteGroup’s fourth-quarter earnings surpassed the Zacks Consensus Estimate by 1.2% while revenues met the same. Quarterly earnings reflect a solid 27% jump driven by higher demand, courtesy of positive U.S. housing market dynamics backed by an improving economy and job market. Revenues increased 12.1% year over year on a rise in the number of homes delivered. While revenues from the homebuilding segment increased 12.3%, the same from the Financial Services segment was up 3.7% year over year. Home closings increased across all operating regions of the company, barring Northeast and Midwest. Notably, shares of PulteGroup outperformed its industry in the past six months. Also, earnings estimates for the first quarter and 2018 moved up in the last 30 days, indicating analysts are optimistic about the stock’s prospects in the near term. However, rising labor, land and material costs are hurting margins, decreasing 110 basis points in 2017.”

A number of other equities research analysts have also weighed in on PHM. B. Riley restated a “buy” rating on shares of PulteGroup in a report on Wednesday, November 1st. Credit Suisse Group restated an “outperform” rating and set a $38.00 price target (up from $32.00) on shares of PulteGroup in a research note on Monday, January 22nd. They noted that the move was a valuation call. Barclays set a $26.00 target price on shares of PulteGroup and gave the stock a “hold” rating in a research note on Wednesday, October 25th. UBS Group raised their price objective on shares of PulteGroup from $38.00 to $41.00 and gave the company a “buy” rating in a research report on Wednesday, January 17th. Finally, Bank of America set a $34.00 price objective on shares of PulteGroup and gave the company a “buy” rating in a research report on Wednesday, October 25th. One research analyst has rated the stock with a sell rating, nine have assigned a hold rating, six have given a buy rating and two have given a strong buy rating to the company’s stock. PulteGroup presently has a consensus rating of “Buy” and a consensus target price of $32.38.

PulteGroup (PHM) traded down $0.32 during midday trading on Friday, hitting $31.14. 2,282,354 shares of the stock were exchanged, compared to its average volume of 4,965,346. The firm has a market capitalization of $9,356.99 and a P/E ratio of 21.63. The company has a current ratio of 0.17, a quick ratio of 0.25 and a debt-to-equity ratio of 0.72. PulteGroup has a 52 week low of $21.06 and a 52 week high of $35.21.

PulteGroup (NYSE:PHM) last posted its earnings results on Tuesday, January 30th. The construction company reported $0.85 earnings per share for the quarter, hitting analysts’ consensus estimates of $0.85. PulteGroup had a net margin of 5.22% and a return on equity of 15.52%. The firm had revenue of $2.79 billion for the quarter, compared to analysts’ expectations of $2.82 billion. During the same quarter in the previous year, the firm posted $0.67 earnings per share. The company’s revenue was up 12.1% on a year-over-year basis. research analysts predict that PulteGroup will post 3.08 earnings per share for the current year.

PulteGroup declared that its Board of Directors has initiated a stock repurchase program on Tuesday, January 30th that permits the company to repurchase $500.00 million in shares. This repurchase authorization permits the construction company to purchase shares of its stock through open market purchases. Shares repurchase programs are typically a sign that the company’s board believes its shares are undervalued.

In other news, CFO Robert Oshaughnessy sold 92,800 shares of PulteGroup stock in a transaction that occurred on Friday, December 8th. The shares were sold at an average price of $33.89, for a total value of $3,144,992.00. Following the completion of the sale, the chief financial officer now directly owns 363,722 shares in the company, valued at $12,326,538.58. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, insider James R. Ellinghausen sold 67,490 shares of PulteGroup stock in a transaction that occurred on Monday, November 20th. The stock was sold at an average price of $32.35, for a total transaction of $2,183,301.50. The disclosure for this sale can be found here. 0.71% of the stock is currently owned by insiders.

Hedge funds have recently made changes to their positions in the company. Meag Munich Ergo Kapitalanlagegesellschaft purchased a new stake in shares of PulteGroup in the third quarter valued at $2,692,000. Denali Advisors grew its holdings in shares of PulteGroup by 17.8% in the fourth quarter. Denali Advisors now owns 166,400 shares of the construction company’s stock worth $2,965,000 after purchasing an additional 25,100 shares during the last quarter. Trust Company of Virginia grew its holdings in shares of PulteGroup by 88.8% in the fourth quarter. Trust Company of Virginia now owns 202,481 shares of the construction company’s stock worth $3,608,000 after purchasing an additional 95,228 shares during the last quarter. Nisa Investment Advisors grew its holdings in shares of PulteGroup by 21.0% in the fourth quarter. Nisa Investment Advisors now owns 118,134 shares of the construction company’s stock worth $2,105,000 after purchasing an additional 20,500 shares during the last quarter. Finally, ID Management A grew its holdings in shares of PulteGroup by 32.0% in the fourth quarter. ID Management A now owns 385,047 shares of the construction company’s stock worth $6,862,000 after purchasing an additional 93,275 shares during the last quarter. Hedge funds and other institutional investors own 83.87% of the company’s stock.

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About PulteGroup

PulteGroup, Inc is a homebuilder in the United States. The Company’s segments include Homebuilding and Financial Services. Its Homebuilding operations are engaged in the acquisition and development of land primarily for residential purposes within the United States and the construction of housing on such land.

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