UBS Starts Coverage of Homebuilders (BZH, CTX, DHI, HOV, KBH, MTH, PHM, RYL, SPF, LEN, LOW)
Lennar posted earnings and as expected these were just ugly. The loss was $3.25 per share after charges, although this includes charges of $3.33 per share. Revenues were $2.34 Billion. Lennar’s home sale revenue fell 44% to $2.2 billion. Cancellation rate was 32%; New orders fell 48% to 5,804 homes. And if this wasn’t foreseeable, the company will be having more job cuts in the coming quarter. Lennar shares are indicated down $1.30 to 41.70 at what will be another set of 52-week lows.
UBS has initiated coverage of homebuilders:
- Beazer (BZH) started as Sell;
- Centex (CTX) started as Buy;
- D.R.Horton (DHI) started as Sell;
- Hovnanian (HOV) started as Neutral;
- KB Home (KBH) started as Buy;
- Lennar started as Sell;
- Meritage (MTH) started as Neutral;
- Pulte (PHM) started as Sell;
- Ryland (RYL) started as Neutral;
- Standard Pacific (SPF) started as Sell.
Lowe’s (LOW) earnings warning last night is also pulling the related and tertiary sector down.
Jon C. Ogg
September 25, 2007