As previously reported, Susquehanna analyst Jack Micenko downgraded homebuilders D.R. Horton (DHI), Lennar (LEN) and TRI Pointe (TPH), all to Neutral from Positive, stating that he is "taking money off the table" after a period of solid performance from the group and not making a call into the quarter. After visiting 200+ communities, he thinks 2019 has "evolved into a classic spring season for both demand and the stocks," noting that homebuilders' spring trade is typically characterized by a period of underperformance. He lowered his price target on D.R. Horton shares to $46 from $49, cut his target on Lennar to $57 from $64 and lowered his target on TRI Pointe to $14 from $16.

UBS raised the firm's price target on D.R. Horton to $200 from $192 and keeps a Buy rating on the shares following the "solid" Q2 results and outlook. D.R. Horton is a best-in-class operator that consistently demonstrates the ability to execute at a high level notwithstanding the interest rate environment, the analyst tells investors in a research note. UBS expects the company and other large public homebuilders to continue benefiting from strong demographic demand support, tight existing home inventory and size/scale/financing advantages relative to most private competitors.

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Says Florida market still feels good. Says back to normal in terms of inventory turns. Says multifamily platform continues to grow. Says sees prospects for cash flow on a consolidated basis to be increasing into 2025. Says seen a period of volatility in rate environment over the last week. Says pleased with gross margins this quarter. Says moves rates along with the market. Says customers reacting very positively to incentives offered. Comments taken from Q2 earnings conference call.

In Q2: Homes closed increased 15% to 22,548 homes and 14% in value to $8.5B. Net sales orders increased 14% to 26,456 homes and 17% in value to $10.1B.

FY24 consensus $36.32B. Sees FY24: Homes closed by homebuilding operations of 89,000 homes to 91,000 homes; Share repurchases of approximately $1.6B; Income tax rate of approximately 23.5% to 24.0%. The company reiterates its fiscal 2024 guidance for cash flow provided by homebuilding operations of approximately $3B.

Notable companies reporting before tomorrow's open, with earnings consensus, include Blackstone (BX), consensus 96c... Elevance Health (ELV), consensus $10.53... D.R. Horton (DHI), consensus $3.06... Genuine Parts (GPC), consensus $2.16... Snap-on (SNA), consensus $4.64... Keycorp (KEY), consensus 22c... Ally Financial (ALLY), consensus 33c... Alaska Air (ALK), consensus ($1.05).