FBR Capital analyst Alex Rygiel upgraded PulteGroup (PHM) to Outperform and raised his price target for the shares to $26 from $23. The analyst this morning also downgraded Taylor Morrison (TMHC) to Market Perform. Rygiel believes PulteGroup is well positioned for continued growth in 2017 following its Q4 results.

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."