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Fly News Breaks for April 16, 2019
Apr 16, 2019 | 07:25 EDT
As previously reported, BTIG analyst Ryan Gilbert initiated Forestar Group (FOR) with a Buy rating and a price target of $23, saying that along with its majority shareholder D.R. Horton (DHI), the company's new development model called "lot manufacturing" can "produce higher returns and more consistent growth" than other developers. The analyst believes that Forestar Group can "rapidly expand its model into new markets" and capture share from undercapitalized, fragmented private developers, forecasting the company to grow annual revenue by an average of 122% per year over the next 3 years. Gilbert contends that Forestart Group's growth potential is not priced in.
News For FOR;DHI From the Last 2 Days
Jun 18, 2019 | 13:20 EDT
Shares of U.S homebuilders are struggling in afternoon trading after construction of new homes unexpectedly fell in May, according to a report from the Commerce Department. HOUSING STARTS: Housing starts dropped 0.9% to 1.269M units in May as the construction of single-family housing units was muted. Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,269,000. This is 0.9% below the revised April estimate of 1,281,000 and is 4.7% below the May 2018 rate of 1,332,000, the Commerce Department said in a statement. Single-family housing starts in May were at a rate of 820,000, 6.4% below the revised April figure of 876,000. The May rate for units in buildings with five units or more was 436,000. ANALYSTS WEIGH IN: Raymond James analyst Buck Horne downgraded Lennar (LEN) and KB Home (KBH) before the market open on Tuesday. The analyst, in a move to highlight his increased near-term caution with the homebuilding sector, cited factors including above-average cyclical valuations amid declining earnings estimates across the industry, softening macro-economic data points and indicators of a late-cycle shift, and an analysis of recent MSA-level re-sale market statistics suggesting competitive inventory remains elevated into summer for the downgrade. PRICE MOVES: Shares of KB Home and Lennar are each down about 2%. OTHERS TO WATCH: Other publicly traded companies in the sector include Beazer Homes (BZH), D.R. Horton (DHI), Hovnanian Enterprises (HOV), M.D.C. Holdings (MDC) and Toll Brothers (TOL).