The country’s largest homebuilders have been improving a little in the first quarter, and that improvement is expected to increase in the second half of the year. D.R. Horton Inc. (NYSE: DHI), PulteGroup Inc. (NYSE: PHM), Lennar Corp. (NYSE: LEN), Hovnanian Enterprises Inc. (NYSE: HOV), Toll Brothers Inc. (NYSE: TOL), NVR Inc. (NYSE: NVR), KB Home (NYSE: KBH) and other builders still face headwinds from falling prices as distressed sales continue.

Last week’s report from the National Association of Realtors indicated that existing inventories have continued to decline, a good sign for homebuilders. There has been a large increase in sales of existing homes to investors and private equity firms who plan to rent out the homes to all those new households. As the inventory declines, prices could begin to rise again, until those homeowners who want to sell finally see their chance (call it ‘pent-up supply’).

D.R. Horton, which released its quarterly results today, posted better than expected EPS and revenue, with EPS coming in a $0.13 on total revenue of $935.6 million. The consensus estimates had called for EPS of $0.04 on revenue of $853.4 million. Horton’s sales, closings, and backlog all finished the quarter with double-digit growth year-over-year. That’s fine, of course, but the market for new houses in the first quarter of last year was pretty awful, so that puts some perspective on this year’s spurt.

Here’s a quick look at the other builders and their most recent reports and expectations for the next quarter.

PulteGroup Inc. (NYSE: PHM) is scheduled to report earnings on Thursday. The consensus estimate calls for an EPS loss of -$0.03 on sales of $836.6 million. In the same period a year ago the company posted an EPS loss of -$0.10. PulteGroup is currently expected to post EPS of $0.04 in its June quarter and full-year EPS of $0.22, with about half that expected in the third quarter. The company’s shares are up nearly 33% since January and up 7.6% for the last 12 months.

Lennar Corp. (NYSE: LEN) posted EPS of $0.08 for its quarter ended in February, double the consensus estimate. For the quarter ending in May, the company is expected to put up EPS of $0.17 on revenue of $883.8 million, and for the full year, EPS is forecast at $0.83. PulteGroup’s shares are up about 31% since the beginning of the year and up more than 36% in the past year.

Hovnanian Enterprises Inc. (NYSE: HOV) has had a rough few years. In its most recent quarter, the company posted an EPS loss of -17% and the consensus estimate for the quarter ending in April is for an EPS loss of -$0.32. For the full-year the company is expected to post an EPS loss of -$1.02. Year-to-date shares are up about 37%, but for the past 12 months shares have lost nearly -44%.

Toll Brothers Inc. (NYSE: TOL) posted an EPS loss of -$0.02 in its January quarter, but the consensus estimate for the April quarter calls for EPS of $0.03. For the full-year, the forecast is for EPS of $0.33, with about half of that coming in the company’s fourth quarter. Year-to-date and for the past 12 months Toll Brothers is up about 17%.

NVR Inc. (NYSE: NVR) reported first quarter EPS of $3.90 last week, below the consensus estimate of $4.16. For the June quarter the company is expected to show EPS of $8.80 and for the full year EPS is expected to come in at $33.87. NVR’s shares are up about 12.8% since the beginning of the year, and for the past 12 months shares are up 6.7%.

KB Home (NYSE: KBH) reported an EPS loss of -$0.59 in its first quarter, about 2.5x the consensus estimate. For the May quarter the EPS loss is estimated to be -$0.33, an improvement of nearly 60% from the same period a year ago. KB Home’s shares are up 16.8% year-to-date, but off more than -31% in the past 12 months.

D.R. Horton opened up 1.5% this morning, at $15.61 in a 52-week range of $8.03-$16.45.

The S&P Homebuilders ETF (AMEX: XHB) opened lower this morning at $20.23 in a 52-week range of $12.22-$21.98.

Paul Ausick

The unofficial closing bells put the DJIA up nearly 79 points to 12,837.78 (0.62%), the NASDAQ rose more than 25 points (0.87%) to 2,935.69, and the S&P 500 rose 0.69% or more than 9 points to 1,352.63.

There were several analyst upgrades and downgrades today, including Automatic Data Processing Inc. (NYSE: ADP) raised to ‘Focus List’ at Credit Suisse; Kraft Foods Inc. (NYSE: KFT) cut to ‘hold’ at Jefferies; Proctor & Gamble (NYSE: PG) raised to ‘overweight’ at JPMorgan; Moody’s Corp. (NYSE: MCO) cut to ‘neutral at UBS; and Lululemon Athletica Inc. (NASDAQ: LULU) raised to ‘outperform’ at Credit Suisse.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Adams Golf Inc. (NASDAQ: ADGF) is up 1.7% at $9.60; Chelsea Therapeutics International Inc. (NASDAQ: CHTP) is up 2.3% at $3.57; American Eagle Outfitters Inc. (NYSE: AEO) is up 6.1% at $15.52; Brown Shoe Co. Inc. (NYSE: BWS) is down -9.3% at $9.46; Canadian Solar Inc. (NASDAQ: CSIQ) is down -12.8% at $2.86; Cell Therapeutics Inc. (NASDAQ: CTIC) is up 0.80% at $1.26; and Hovnanian Enterprises Inc. (NYSE: HOV) is up 3.3% at $2.48.

Other standouts from today include the following stocks:

Transcend Services Inc. (NASDAQ: TRCR) is up more than 39% at $29.24. The medical transcription service is being acquired by Nuance Communications Inc. (NASDAQ: NUAN) for $300 million in net cash ($29.50/share). More coverage here.

Magnetek Inc. (NASDAQ: MAG) is up 22% at $17.50. The electrical equipment maker posted a robust quarterly earnings report today.

The Bon Ton Stores Inc. (NASDAQ: BONT) is up more than 32% at $6.95. The retailer reported lower-than-expected earnings and revenues, but its forecast is above expectations.

Pandora Media Inc. (NYSE: P) is down more than -24% at $10.83. The Internet radio company posted worse than expected earnings last night. More coverage here.

Vermillion Inc. (NASDAQ: VRML) is down -29% at $2.13. The medical device maker’s stock more than doubled yesterday, and today’s action is likely a bit of profit-taking following an analyst’s downgrade. More coverage here.

Stay tuned for Thursday. We have noted the following events on the schedule (all times Eastern):

• 7:30 a.m. – Challenger Gray & Christmas job-cut report
• 8:30 a.m. – New unemployment benefits claims
• 10.00 a.m. – Census Bureau quarterly services survey
• 10:30 a.m. – EIA natural gas storage report
• 4:30 p.m. – Federal Reserve balance sheet and money supply

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Paul Ausick

Pandora Media Inc. (NYSE: P) reports after the close on Tuesday and investors are still trying to get a better grasp on its business model as far as how it will make money.  The company surprised before.  Estimates are -$0.02 EPS on just over $83 million in sales and the market value is $2.2 billion.

WEDNESDAY, MARCH 7

American Eagle Outfitters Inc. (NYSE: AEO) has estimates of $0.35 EPS and $1.05 billion in sales. With where its stock is around $14.50, this looks fairly valued so it will likely take good news or bad news to move the stock.

Children’s Place Retail Stores Inc. (NASDAQ: PLCE) has estimates of $0.91 EPS on just over $478.1 million in sales.

H&R Block Inc. (NYSE: HRB) is expected to report $0.05 EPS and $700 million sales, but next quarter is the tax-season money quarter.  Next quarter targets are $2.24 EPS on $2.11 billion in sales.  To emphasize how much the tax season matters, the entire fiscal year-end of April 2012 is expected to be $3.01 billion.

Hovnanian Enterprises Inc. (NYSE: HOV) is expected to report -$0.47 EPS and $287.66 million in sales.

THURSDAY, MARCH 8

A123 Systems Inc. (NASDAQ: AONE) failed to rally on Tuesday’s construction news.  Estimates are -$0.51 EPS on almost $48.5 million in revenues.  Shares are well under $2.00 now.

Altera Corporation (NASDAQ: ALTR) is a ‘business update’ rather than a formal earnings release.  Estimates are $0.37 EPS and $426.8 million in sales.

Anheuser Busch Inbev SA (NYSE: BUD) has estimates of $0.91 EPS and $9.9 billion in sales.  We would remind investors that this is now translated from Euros now that this is not a U.S.-based company.

Renren Inc. (NYSE: RENN) is still down and out from its 2011 IPO but it is still very actively traded as a Facebook knock-off in China.  Renren is expected to report earnings of $0.02 EPS and almost $32.3 million in sales. Next quarter estimates are -$0.04 EPS on almost $30.9 million in sales.

Smithfield Foods Inc. (NYSE: SFD) is expected to report earnings of $0.66 EPS and $3.5 billion in sales.

Williams Sonoma Inc. (NYSE: WSM) is expected to report earnings of $1.13 EPS and $1.25 billion in sales.  Shares are down almost 15% from the 52-week high and the shares are still close to the consensus price target of $39.57.

Keep in mind on any of these companies that dates and estimates can change without notice.

JON C. OGG

We have broken these out by day and included Thomson Reuters consensus data on each.  Color has been added on some of the names as well.

MONDAY, MARCH 5

Focus Media Holding Ltd. (NASDAQ: FMCN) has already recovered handily from when alleged accounting woes were surrounding this company.  This is the outdoor advertiser in China.  Estimates are $0.61 EPS and $225.1 million in sales.

Teavana Holdings Inc. (NYSE: TEA) remains a premium company with great products and growth, but at a price for a small tea retail empire trading at close to 40-times next year’s expected earnings.  Estimates are $0.32 EPS on $67.8 million in sales.

Urban Outfitters Inc (NASDAQ: URBN) has recovered off of its lows but the company remains an early turnaround story.  The real question is what the growth opportunities are for the next decade compared to the growth of the last decade.  Earnings estimates are $0.20 EPS on $742.9 million in sales.

VeriFone Systems Inc. (NYSE: PAY) has estimates of $0.52 EPS on about $417.5 million in sales.

TUESDAY, MARCH 6

Pandora Media Inc. (NYSE: P) remains in limbo and investors are still trying to get a better grasp on its business model as far as how it will make money.  The company surprised before.  Estimates are -$0.02 EPS on almost $83 million in sales and the market value is $2.2 billion.

WEDNESDAY, MARCH 7

American Eagle Outfitters Inc. (NYSE: AEO) has estimates of $0.35 EPS and $1.05 billion in sales.

Children’s Place Retail Stores Inc. (NASDAQ: PLCE) has estimates of $0.89 EPS on just over $478 million in sales.

H and R Block Inc. (NYSE: HRB) is expected to report $0.05 EPS and $700 million sales, but next quarter is the tax-season money quarter and the estimates are currently $2.24 EPS on $2.11 billion in sales.  To emphasize how much the tax season matters, the entire fiscal year-end of April 2012 is expected to be $3.01 billion.

Hovnanian Enterprises Inc. (NYSE: HOV) is expected to report -$0.47 EPS and $287.6 million in sales.  While this is a homebuilder and while it has been widely followed before, this is probably not going to be a sector-mover for homebuilders.

THURSDAY, MARCH 8

A123 Systems Inc. (NASDAQ: AONE) is challenged with shares now down under $2.00 and a weak performance late in the week.  Estimates are -$0.41 EPS on almost $53.7 million in revenues.  It seems sad that lithium-ion batteries are not doing well and around $1.80 it has a 52-week range of $1.51 to $8.70.

Altera Corporation (NASDAQ: ALTR) is a ‘business update’ rather than a formal earnings release but investors will be watching its guidance.  Estimates are $0.37 EPS and $426.8 million in sales.

Anheuser Busch Inbev SA (NYSE: BUD) has estimates of $0.91 EPS and $9.9 billion in sales, but keep in mind that this is now translated from Euros now that this is not a U.S.-based company.

Renren Inc. (NYSE: RENN) is down massively from its 2011 IPO but it is still very actively traded as a Facebook knock-off in China.  Renren is expected to report earnings of $0.02 EPS and $32.3 million in sales.

Smithfield Foods Inc. (NYSE: SFD) is expected to report earnings of $0.67 EPS and $3.5 billion in sales.

Williams Sonoma Inc. (NYSE: WSM) is expected to report earnings of $1.13 EPS and $1.25 billion in sales.  Shares are down almost 15% from the 52-week high and the shares are still close to the consensus price target of $39.43.

Keep in mind on any of these companies that dates and estimates can change without notice.

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JON C. OGG

The unofficial closing bells put the DJIA down nearly 56 points to 12,359.92 (-0.45%), the NASDAQ rose more than 4 points (0.16%) to 2,674.22, and the S&P 500 fell -0.25% or more than 3 points to 1,277.81.

There were several analyst upgrades and downgrades today, including Goldman Sachs Group Inc. (NYSE: GS) cut to ‘market perform’ at Wells Fargo; Apollo Group Inc. (NASDAQ: APOL) reiterated as ‘outperform’ and target price raised to $60 at Credit Suisse; Kohl’s Corp. (NYSE: KSS) cut to ‘hold’ at Argus; SanDisk Corp. (NASDAQ: SNDK) raised to ‘buy’ at Sterne Agee; and FedEx Corp. (NYSE: FDX) started as ‘outperform’ at Wells Fargo.

Earnings reports of note since markets closed yesterday include: Commercial Metals Co. (NYSE: CMC) is up more than 4% at $15.01; Apollo Group is up about 5.5% at $56.68, after posting a new 52-week high of $57.09 earlier today; Imperial Sugar Co. (NASDAQ: IPSU) is down nearly -6% at $3.32; PriceSmart Inc. (NASDAQ: PSMT) is down nearly -15% at $60.13; Greenbrier Cos. (NYSE: GBX) is up nearly 9% at $25.97; and Texas Industries Inc. (NYSE: TXI) is down more than -3% at $28.15.

Other standouts from today include the following stocks:

Acadia Healthcare Co. Inc. (NASDAQ: ACHC) is up nearly 19% at $11.60 after posting a new 52-week high of $11.81 earlier today. The healthcare services company agreed to pay $91 million to acquire three additional facilities in Arizona, Oklahoma, and Texas.

Krispy Kreme Doughnuts Inc. (NYSE: KKD) is up nearly 12% at $7.16. The doughnut maker recently opened its 10,000th store and the stock was upgraded to ‘overweight’ at Stephens with a target price of $8.50.

RF Micro Devices Inc. (NASDAQ: RFMD) is down more than -19% at $4.55 after posting a new 52-week low of $4.45 earlier today. The technology company warned that sales in the third fiscal quarter would be 10% lower than previously forecast.

EnerNOC Inc. (NASDAQ: ENOC) is down nearly -9% at $9.43. The energy services company’s revenues are threatened by a recent regulatory ruling.

Saba Software Inc. (NASDAQ: SABA) is up more than 15% at $8.54. The cloud software company lost less than expected in its most recent quarter and said that it would return to profitability in the second of the year.

Hovnanian Enterprises Inc. (NYSE: HOV) is up more than 10% at $1.73. The homebuilder’s stock is probably reacting to the remarks by two Fed presidents supporting additional lending and homebuilding.

Stay tuned for Monday. Atlanta Fed President Dennis Lockhart is giving a speech. Here are the noteworthy events on the schedule (all times Eastern):

• 11:30 a.m. – 3- and 6-month Treasury bill auctions
• 3:00 p.m. – Federal Reserve consumer credit report

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Paul Ausick

The unofficial closing bells put the DJIA up nearly 336 points to 12,101.92 (2.85%), the NASDAQ rose more than 80 points (3.19%) to 2,603.73, and the S&P 500 rose 2.98% or nearly 36 points to 1,241.22.

There were several analyst upgrades and downgrades today, including AT&T Inc. (NYSE: T) cut to ‘neutral’ at JPMorgan. Other ratings actions today include F5 Networks Inc. (NASDAQ: FFIV) cut from ‘perform’ to ‘underperform’ at Oppenheimer; Urban Outfitters Inc. (NASDAQ: URBN) raised from ‘outperform’ to ‘Top Pick’ at FBR Capital; Amgen Inc. (NASDAQ: AMGN) added to ‘Strong Buy List’ at Zacks; and Baxter International Inc. (NYSE: BAX) lowered from ‘Top Pick List’ to ‘outperform’ and target price lowered from $61 to $58 at RBC Capital Markets.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: ConAgra Foods Inc. (NYSE: CAG) is up 4% at $26.18; General Mills Inc. is down about -1% at $39.19; Navistar International Corp. (NYSE: NAV) is up nearly 7% at $39.05; Sanderson Farms Inc. (NASDAQ: SAFM) is down -4% at $48.66; and Jefferies Group Inc. (NYSE: JEF) is up more than 22% at $14.46. After markets close today we get earnings from Nike Inc. (NYSE: NKE) and Oracle Corp. (NASDAQ: ORCL). See our 360 coverage on Oracle here and coverage of the ConAgra and General Mills reports here.

Other standouts from today include the following stocks:

Targacept Inc. (NASDAQ: TRGT) is down more than -35% at $5.01, after posting a new 52-week low of $4.92 earlier in the day. The pharmaceutical maker’s anti-depressant drug, developed in conjunction with AstraZeneca plc (NYSE: AZN) has failed a late-stage trial.

Cobalt International Energy Inc. (NYSE: CIE) is up nearly 38% at $13.81. The oil & gas exploration company has signed a production-sharing agreement for a block offshore of Angola. Cobalt owns 40% of the project and is the operator.

Canadian Solar Inc. (NASDAQ: CSIQ) is up nearly 33% at $2.93. The solar panel maker has sold about 86 megawatts of generation to TransCanada Corp. (NYSE: TRP) for approximately $455 million.

Prestige Brand Holdings Inc. (NYSE: PBH) is up nearly 21% at $11.27. The drug and cleaning supplies company paid $660 million for a selection of nonprescription drugs from GlaxoSmithKline PLC (NYSE: GSK).

Hovnanian Enterprises Inc. (NYSE: HOV) is up more than 18% at $1.50. The home builder is riding the wave of good news about new housing starts.

CVS Caremark Corp. (NYSE: CVS) is up about 9% at $39.85, after posting a new 52-week high earlier of $39.86. The healthcare company raised fiscal year guidance and boosted its quarterly dividend by 30%, to $0.1625/share.

Stay tuned for Wednesday. The most widely anticipated report for tomorrow is due at 8:30 a.m. from the National Association of Realtors, which will be revising its new home sales data from 2007 forward. Lower sales of up to -13% are expected. Here are other noteworthy events on the schedule (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 10:30 a.m. – EIA weekly petroleum status report
• 1:00 p.m. – 7-year Treasury note auction

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Paul Ausick

The unofficial closing bells put the DJIA down about 6 points to 11,862.68 (-0.05%), the NASDAQ rose more than 14 points (0.56%) to 2,555.33, and the S&P 500 rose 0.3% or more than 3.5 points to 1,219.40.

There were several analyst upgrades and downgrades today, including an “outrageous” prediction from the UK’s Saxo Bank that Apple Inc. (NASDAQ: AAPL) would lose half its value in 2012. Other ratings actions today include Southern Copper Corp. (NYSE: SCCO) restarted as ‘equal weight’ with a $35 target price at Morgan Stanley; Amgen Inc. (NASDAQ: AMGN) raised to ‘neutral’ with a target price of $57 at Goldman Sachs; and Discover Financial Services (NYSE: DFS) raised to ‘buy’ at Stifel Nicolaus. Research in Motion Ltd. (NASDAQ: RIMM) received a number of ratings changes this morning following an uninspired earnings report and delayed release of its new operating system software: shares cut to ‘market perform’ at BMO Capital Markets; maintained as ‘hold’ at Needham; maintained as ‘neutral’ at Credit Suisse; maintained ‘hold’ with lowered price target of $15 at Canaccord Genuity.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: Research in Motion Ltd. is down more than -11.5% at $13.38, after posting a new 52-week low of $13.12; Darden Restaurants Inc. (NYSE: DRI) is down -0.5% at $43.52; Steward Enterprises, Inc. (NASDAQ: STEI) is down more than -1.5% at $5.41; Hovananian Enterprises Inc. (NYSE: HOV) is down more than -4% at $1.29; and Quiksilver Inc. (NYSE: ZQK) is up more than 11% at $3.42.

Other standouts from today include the following stocks:

ISTA Pharmaceuticals Inc. (NASDAQ: ISTA) is up nearly 71% at $6.65. The eye-care drug company is the target of a hostile takeover bid from Valeant Pharmaceuticals International Inc. (NYSE: VRX) at a 68% premium to last night’s closing share price, or $6.50/share. More coverage here.

RSC Holdings Inc. (NYSE: RRR) is up more than 57% at $17.88, a new 52-week high. The construction and industrial equipment rental company is being acquired by competitor United Rentals Inc. (NYSE: URI) for $18/share, or about $1.9 billion in cash and stock.

Morton’s Restaurant Group Inc. (NYSE: MRT) is up nearly 33% at $$6.85. The steakhouse chain has agreed to an all-cash acquisition by privately held Landry’s Inc. at $6.90/share, for a total price of about $116.6 million.

Inhibitex Inc. (NASDAQ: INHX) is down more than -20.5% at $10.32. The biopharmaceutical firm is being hit with concerns over a new hepatitis C drug following the withdrawal of a rival drug discovered to impair liver function.

CryptoLogic Ltd. (NASDAQ: CRYP) is up more than 42% at $2.25, after posting a new 52-week high of $2.30 earlier today. The online gambling software maker is expected to get a takeover offer from Amaya Gaming Group (OTC: AMYGF) worth about $34.5 million.

Cobalt International Energy Inc. (NYSE: CIE) is up more than 21% at $10.90. The oil & gas E&P company was able to extend its lease on a deepwater rig from Transocean Ltd. (NYSE: RIG) that enables the company to continue exploring for two prospects offshore of Angola that the company believes may hold up to 2 billion barrels of crude.

Stay tuned for Monday. Richmond Federal Reserve Bank President Jeffrey Lacker is speaking in Charlotte, NC. Here are other noteworthy events on the schedule (all times Eastern):

• 10:00 a.m. – National Association of Builders housing market index
• 11:30 a.m. – 3- and 6- month Treasury bill auction
• 1:00 p.m. – Two-year Treasury note auction

Have a great weekend.

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Paul Ausick

Among the six homebuilders, only NVR had a significant jump in its target price since mid-October. The median target price for NVR is now $765, up from $728, and the stock price as of about noon today is $682.57, for an upside potential of 12.1%. That’s not a grand number, but it’s the best in the sector. Target prices for PulteGroup, D.R. Horton, Hovnanian, and Beazer did not change and the target price for Toll Brothers rose just $0.15, from $21.50 to $21.65. Not a big display of confidence in the sector.

Home Depot’s median target price rose from $40.00 to $42.00, and the stock’s current price of $40.51 implies a potential gain of 3.7%. Lowe’s median target price rose from $23.00 to $26.00, and at the current price of $25.13 the implied gain is 3.5%. Even though now is not a particularly good season for home improvement projects, either one or both of these stores could easily push through the new targets.

While the target prices did not change for five of the homebuilders, all but NVR saw share price gains of more than 30% in the last six weeks, with PulteGroup shares gaining 51%. Home Depot and Lowe’s shares are up 16% and 19%, respectively, in the same period. These share price rises for homebuilders indicate more investor interest in these stocks, analysts’ lack of enthusiasm indicates that caution remains the best policy.

None of these builders pays a dividend, with the exception of Beazer which offers investors a dividend yield of 1.2%. Home Depot’s dividend yield is 2.9%, and Lowe’s offers a dividend yield of 2.3%.

For investors who believe they have to participate in this sector, Home Depot remains the best choice, with Lowe’s the best alternative. Building — and selling — new houses is still a risky business.

Paul Ausick

Worse, there is not much expectation that the market will turn around, at least until 2013. More foreclosed homes coming on the market will continue to depress prices, and until inventories of unsold homes are cleared, there simply cannot be a significant recovery. The homebuilders we are looking at include NVR (NYSE: NVR), Toll Brothers (NYSE: TOL), PulteGroup (NYSE: PHM), Hovnanian Enterprises (NYSE: HOV), D.R. Horton (NYSE: DHI) and Beazer Homes USA (NYSE: BZH).

Home improvement stores have also had to struggle over the past several years. Shares of Home Depot (NYSE: HD) and Lowe’s Companies (NYSE: LOW) are both lower today than they were five years ago.

Share prices were pegged at about noon today, and all data comes from Yahoo! Finance.

NVR has a median target price of $728.00 from four brokers. Shares are trading today at $620.99, for an implied gain of $107.01, or 14.7%. NVR’s forward P/E is 17.6 and the company does not pay a dividend. The stock’s 52-week trading range is $554.71 to $804.31, and at today’s price that is about 12% above its 52-week low and 23% below the 52-week high. NVR’s share price has risen about 12% since October 2006, and of all the homebuilders, it is the only one that can point to a gain over that period. The company’s consensus EPS estimate for 2011 has dropped from $28.02 to $26.45. There might be an opportunity here, but it is a pretty slim one.

Toll Brothers has a median target price of $21.50 from 14 brokers. Shares are trading today at $15.29, for an implied gain of $6.21, or 28.9%. Its forward P/E is 49.35 and the company does not pay a dividend. The stock’s 52-week trading range is $13.16 to $22.42, and at today’s price that is about 16% above its 52-week low and 32% below the 52-week high. Toll Brothers is expected to post EPS of $0.20 for its 2011 fiscal year ending this month — and that is up from an earlier EPS estimate of just $0.02. The company’s position at the luxury end of the market has been something of a prop to the share price, but the U.S. economy is not minting many new millionaires right now.

PulteGroup has a median target price of $6.50 from 15 brokers. Shares are trading today at $4.14, for an implied gain of $2.36, or 36.3%. PulteGroup’s forward P/E is 32 and the company does not pay a dividend. The stock’s 52-week trading range is $3.29 to $8.69, and at today’s price that is about 26% above its 52-week low and 52% below the 52-week high. PulteGroup was one of the 10 worst performing stocks in the recently completed quarter, losing 45% of its value. There is nothing about the homebuilding industry or PulteGroup’s recent performance that justifies the forward P/E ratio of 32. Hope is not a strategy.

Hovnanian Enterprises has a median target price of $1.38 from eight brokers. Shares are trading today at $1.20, for an implied gain of $0.18, or 13%. Hovnanian’s forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $0.89 to $5.00, and at today’s price that is about 35% above its 52-week low and 76% below the 52-week high. Hovnanian is asking debt holders to exchange old notes for new ones carrying a lower interest rate and a longer term. The offer is scheduled to end next week. The company’s corporate debt rating is CC, just two notches above default. Debt holders are unlikely to ride to the company’s rescue.

D.R. Horton has a median target price of $13.00 from 14 brokers. Shares are trading today at $9.62, for an implied gain of $3.38, or 26%. Horton’s forward P/E is 19.3 and the company pays a dividend yield of 1.5%. The stock’s 52-week trading range is $8.03 to $13.50, and at today’s price that is about 59% above its 52-week low and 29% below the 52-week high. Horton is expected to post EPS for the quarter just ended of $0.14, and full-year EPS of $0.20 for the year ended in September. The consensus estimate for 2012 full-year EPS is $0.50. If the market is getting weaker, as many believe, the company has exactly no chance of meeting that 2012 number.

Beazer Homes USA has a median target price of $3.00 from seven brokers. Shares are trading today at $1.81, for an implied gain of $1.19, or 39.7%. Its forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $1.35 to $6.23, and at today’s price that is about 12% above its 52-week low and 81% below the 52-week high. Beazer’s biggest trouble is that it is a builder of entry-level homes, the sector that is hardest hit by the number of foreclosed properties coming on the market. One thing that could help Beazer a little is that home owners have begun taking their houses off the market because they are unwilling to sell for the current low prices. Inventory is still high, but it was lower in September than in August.

Home Depot has a median target price of $40.00 from 22 brokers. Shares are trading today at $34.97, for an implied gain of $5.03, or 12.6%. Home Depot’s forward P/E is 13.14 and the company pays a dividend yield of 2.9%. The stock’s 52-week trading range is $28.13 to $39.38, and at today’s price that is about 24% above its 52-week low and 11% below the 52-week high. Research firm BuildFax reports thats home remodeling projects increased by 29% in August compared with August 2010. The firm attributes the increase to refinancing of existing homes at current low interest rates. With the peak remodeling season behind us for another year, this growth could begin to slow down.

Lowe’s Companies has a median target price of $23.00 from 20 brokers. Shares are trading today at $21.09, for an implied gain of $1.91, or 8.3%. Its forward P/E is 11.93 and the company pays a dividend yield of 2.7%. The stock’s 52-week trading range is $18.07 to $27.45, and at today’s price that is about 17% above its 52-week low and 23% below the 52-week high. Lowe’s announced this morning that it was closing another 20 stores across the U.S. and expects to take a charge of $0.17 to $0.20 against second-quarter EPS. About 1,950 employees will lose their jobs. Lowe’s performance has been weaker than Home Depot’s for a couple of years now, and this year the share price is about flat, compared with Home Depot’s share price gain of 15%.

Paul Ausick

Struggling homebuilders like Hovnanian Enterprises, Inc. (NYSE: HOV), PulteGroup, Inc. (NYSE: PHM), KB Home (NYSE: KBH), and others have a tough time competing on price with the thousands of foreclosed properties on the market in states like Nevada, California, Arizona, Michigan, and Florida. Big mortgage lenders like Wells Fargo & Co. (NYSE: WFC), Bank of America Corp. (NYSE: BAC), and JPMorgan Chase & Co. (NYSE: JPM) are not seeing a floods of buyers either, and even re-financings have slowed while interest rates are at their lowest level in decades.

In Nevada, where 1 house in 118 is in foreclosure, home prices actually rose in September by about 2.8%.  The median price for a house in the Las Vegas area rose to $123,400, compared with $120,000 in August, but still 8.6% below the $135,000 median in September 2010.

Total sales in the Las Vegas area, including condos, houses, and townhomes, totaled 4,108 in September, down from 4,693 in August, but up from 3,603 in September a year ago. Unemployment is 14.2% in Las Vegas. So who’s buying?

Investors paying cash are the likeliest suspects. And about 45% of the sales in August were bank-owned properties. The Mortgage Bankers Association’s weekly mortgage application survey still shows that nearly 80% of all mortgage applications are seeking refinancing at the historically low interest rates available.

All those sales around Las Vegas are existing homes, not new homes. And the expectation is that as the robo-signing issues are resolved, more foreclosed properties will come on the market, not only in Las Vegas, but all over the country. New home builders don’t stand much of a chance.

Housing market research firm Clear Capital expects home prices to fall by -1.6% in the fourth quarter of 2011 and another -3.2% by the end of the first quarter of 2012.  At least some of that pressure is due to the expected growth of foreclosed properties on the market.

And the banks? If you were a banker and a homeowner with a 6% mortgage came in and asked to re-finance at 4%, what would you say? If the homeowner was switching banks and has gold-plated credit, you might agree, but otherwise not likely. Given the headaches in the housing market, it wouldn’t be too surprising if all the big banks just decided to get out of the home lending business.

The housing market has seen its seasonal summer boomlet for this year. What’s left of this year won’t turn around a dismal year in the US housing market.

Paul Ausick