Homebuilders upgraded by KeyBanc -
There are some weak quarters ahead, but the group is up again today, evidently early money moving in ahead of an eventual sector rebound -
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KeyBanc more bullish on homebuilder names, upgrades five stocks to Overweight -
As previously reported, KeyBanc analyst Kenneth Zener upgraded D.R. Horton (DHI), Lennar (LEN), Meritage Homes (MTH), PulteGroup (PHM) and TopBuild (BLD) to Overweight from Sector Weight, and Toll Brothers (TOL) and KB Home (KBH) to Sector Weight from Underweight. The analyst is changing his underweight Builder outlook to overweight, based on his view "Early Pain = Early Gain," with most builders' underperformance relative to the S&P by the 3rd quartile in previous cycles. On balance, Zener sees fundamental and rate pressures persisting, but positive relative performance. He has price targets of $84 on D.R. Horton, $89 on Lennar, $87 on Meritage, $47 on PulteGroup, and $205 on TopBuild.
CCS, MHO