Investing.com — Wedbush upgraded Pultgroup Inc (NYSE: ) to “outperform” from “neutral” due to strong stock price downside and strong catalysts for growth. Shares were up 2.1% at $110.
Pult stock has fallen nearly 27% since hitting a record high of $149.47 on Oct. 18, though it has gained 2% over the same period. Wedbush expects lower mortgage rates and better credit availability to support homebuilder growth in 2025.
The firm raised its Q4 earnings estimate for Pulte to $3.29 per share, above the Refinitiv consensus of $3.28, on expectations of strong home closings. It raised FY25 and FY26 EPS forecasts to $14.58 and $16.29, respectively, citing mid-single-digit revenue growth from a higher base in FY24.
Wedbush highlighted Pulte’s strong capital return strategy, including more than $1.5 billion in authorized stock buybacks in 2024, and its lean balance sheet, which is expected to move to a net cash position by the end of fiscal 2024. is
The brokerage has set a price target of $135, based on 2 times its FY25 firm book value estimate of $68.28. Despite trading at a premium to peers, Wedbush considers Pult to be undervalued given its financial strength and growth prospects.
