Barclays analyst Matthew Bouley thinks homebuilders are likely to see a "wave of positive estimate revisions" into and throughout Q3 earnings season driven mainly by better orders, "in turn encouraging further stock outperformance." As such, the analyst raised his price target for Overweight-rated D.R. Horton to $54 from $52, Overweight-rated KB Home (KBH) to $34 from $30, Overweight-rated Lennar (LEN) to $60 from $54, Overweight-rated PulteGroup (PHM) to $36 from $32, and Overweight-rated Taylor Morrison (TMHC) to $25 from $23. Bouley's August real estate agent survey showed a six-point sequential uptick in buyer traffic. This is an atypical increase for August relative to the survey's history, with indication that lower interest rates are finally prompting incremental demand activity, Bouley tells investors in a research note.

Zelman upgraded PulteGroup to Outperform from Neutral.

BTIG analyst Carl Reichardt raised the firm's price target on PulteGroup to $133 from $122 and keeps a Buy rating on the shares after its Q1 earnings beat. The outperformance was driven by delivery volume, gross margin, financial services income and a lower tax rate, though these were partially offset by lower average selling prices, SG&A ex-the benefit and land sales profit, the analyst tells investors in a research note. BTIG maintains that PulteGroup's high relative returns, conservative balance sheet, balanced product mix and scale advantages over many smaller peers are underappreciated.

Reports Q1 revenue $3.95B, consensus $3.58B. "PulteGroup reported outstanding financial results that included first quarter records for home sale revenues of $3.8 billion, gross margins of 29.6% and earnings per share of $3.10, all of which helped to drive a return on equity* of 27.3%," said PulteGroup President and CEO Ryan Marshall. "Our strong financial performance reflects both favorable demand conditions and our balanced operating model that allows us to more effectively meet the individual needs of first-time, move-up and active-adult consumers. After more than a decade of underbuilding, it is estimated that our country has a structural shortage of several million homes," added Marshall. "Given PulteGroup's broad operating platform and deep product portfolio, along with the powerful incentive programs we can offer to help improve the overall affordability equation, we are well positioned to expand our market share while helping to provide much needed new housing stock."