Beazer Homes Inc. (BZH)

[PennyP1cker]

I think BZH is a little weaker than some of the other home builders but it's not bad.


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News...

Wedbush's Jay McCanless made the following rating and price target changes:

Beacon Roofing Supply upgraded from Neutral to Outperform with a price target boosted from $52 to $70.

Beazer Homes upgraded from Neutral to Outperform with an unchanged $22 price target.

Beazer Homes: Rising Demand

Beazer Homes' stock has fallen around 17 percent since the start of 2018 and is now trading at 0.7x the estimated book value of $18.77, which is a discount to the group average of 1.4x, McCanless said. The stock is undervalued in the analyst's view, especially when Beazer is likely to hit its 2018 revenue target of $2 billion and come in just below its adjusted EBITDA margin target of 10 percent.

Beazer Homes' move to redeem its $96.4 million outstanding notes at the end of the fiscal 2018 represents another growth catalyst, the analyst said. The continued balance sheet improvement is an "overlooked facet of the story" and is one of the main reasons why the company can boost its land spending and expand into new product segments like gatherings, McCanless said.