Three reasons investors have fallen in love -2-
Companies calculate earnings per share by dividing net income by average counts of shares outstanding. Leaving the 17 home builders in the same order, here is how their share counts have changed over the past one year and five years through their most recently reported fiscal quarter-ends:
Home builder Ticker One-year change in average share count Five-year change in average share count D.R. Horton Inc. DHI -3% -11% Lennar Corp. Class A LEN -2% -14% NVR Inc. NVR -1% -16% PulteGroup Inc. PHM -6% -22% Toll Brothers Inc. TOL -4% -27% Taylor Morrison Home Corp. TMHC -7% -2% Meritage Homes Corp. MTH 1% -10% KB Home KBH -7% -18% M.D.C. Holdings Inc. MDC 3% 13% Tri Pointe Homes Inc. TPH -2% -34% Frontdoor Inc. FTDR 0% -3% Cavco Industries Inc. CVCO -3% -5% M/I Homes Inc. MHO 0% -2% LGI Homes Inc. LGIH -1% -6% Century Communities Inc. CCS -3% 7% Green Brick Partners Inc. GRBK -5% -10% Patrick Industries Inc. PATK -11% -11% Source: FactSet
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The Oppenheimer analysts' "top pick in the space" is PulteGroup, for which their price target is $110, which is 46% above the stock's closing price of $75.59 on Wednesday. They also have outperform ratings on Toll Brothers Inc. (TOL) and Tri Pointe Homes Inc. (TPH). For Toll Brothers, their price target is $110, which is 47% above the closing price of $75.04 on Wednesday. For Tri Pointe, their price target is $36, which is 31% above Wednesday's closing price of $27.56.
Leaving the 17 stocks in the same order, here's a summary of ratings and price targets among analysts polled by FactSet:
Home builder Ticker Share buy ratings Share neutral ratings Share sell ratings No. of analysts polled by FactSet Oct. 11 price Consensus price target Implied 12-month upside potential D.R. Horton Inc. DHI 64% 32% 4% 22 $108.67 $143.35 32% Lennar Corp. Class A LEN 71% 19% 10% 21 $114.27 $140.88 23% NVR Inc. NVR 25% 62% 13% 8 $6,178.66 $6,685.00 8% PulteGroup Inc. PHM 81% 19% 0% 16 $75.59 $97.20 29% Toll Brothers Inc. TOL 58% 32% 10% 19 $75.40 $93.77 24% Taylor Morrison Home Corp. TMHC 22% 78% 0% 9 $42.97 $53.40 24% Meritage Homes Corp. MTH 55% 45% 0% 11 $119.27 $170.57 43% KB Home KBH 44% 50% 6% 16 $45.71 $56.25 23% M.D.C. Holdings Inc. MDC 33% 50% 17% 6 $40.75 $52.13 28% Tri Pointe Homes Inc. TPH 71% 29% 0% 7 $27.56 $38.33 39% Frontdoor Inc. FTDR 43% 43% 14% 7 $31.48 $40.20 28% Cavco Industries Inc. CVCO 100% 0% 0% 3 $273.39 $374.67 37% M/I Homes Inc. MHO 100% 0% 0% 1 $83.65 $116.00 39% LGI Homes Inc. LGIH 33% 50% 17% 6 $97.65 $128.25 31% Century Communities Inc. CCS 50% 25% 25% 4 $64.37 $79.83 24% Green Brick Partners Inc. GRBK 0% 100% 0% 4 $41.73 $52.50 26% Patrick Industries Inc. PATK 72% 14% 14% 7 $73.66 $93.71 27% Source: FactSet
Don't miss: Dividend stocks are dirt cheap. It may be time to back up the truck.
-Philip van Doorn
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10-14-23 1007ET
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