As previously reported, Raymond James analyst Buck Horne double downgraded D.R. Horton (DHI) to Market Perform from Strong Buy after refreshing his estimates to reflect the 2019 macro environment and being more selective with valuations in the homebuilding sector. Historically, the odds of meaningful stock outperformance among homebuilders from President's Day through Memorial Day "effectively drops to a 50/50 proposition," Horne tells investors. While he still thinks Horton's scale, efficiency and balance sheet warrant a premium, Horne feels the current spread to the group reflects its advantages. Horne also downgraded PulteGroup (PHM) to Market Perform from Outperform this morning.

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.