Housing

BofA/Merrill Lynch Resumes Homebuilder Coverage (TOL, BZH, KBH, RYL, DHI, HOV, PHM, LEN, MDC, XHB)

Bank of America/Merrill Lynch has initiated coverage of the homebuilder sector this morning.  Technically this is a resumption of coverage.  While some are positive calls, there are still some cautious undertones here from the firm.  Toll Brothers Inc. (NYSE: TOL) was initiated with an “Underperform” rating with a $16.00 target.  The “Neutral” rated homebuilder is Beazer Homes USA Inc. (NYSE: BZH) with a $4.50 target.  The “BUY” rated homebuilders are as follows:

  • KB Home (NYSE: KBH) with a $20 target,
  • Ryland Group Inc. (NYSE: RYL) with a $28 target,
  • DR Horton Inc. (NYSE: DHI) with a $16 target,
  • Hovnanian Enterprises Inc. (NYSE: HOV) with a $5 target,
  • Pulte Homes Inc. (NYSE: PHM) with a $13 target,
  • Lennar Corp. (NYSE: LEN) with a $21 target,
  • and MDC Holdings Inc. (NYSE: MDC) with a $43 target.

There has hardly been any reaction in the SPDR S&P Homebuilders (NYSE: XHB) this morning, but most of these components are indicated higher after coverage was initiated this morning.

You are invited to join our free daily email distribution list to hear about top analyst upgrades and downgrades, IPOs and secondary offerings, ongoing day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG
FEBRUARY 17, 2010