Credit Suisse starts coverage of homebuilders, expects strong demand

KolmarBNH

05/04/2022 10:49

(Updates)
    ** Credit Suisse initiates coverage on homebuilders
PulteGroup Inc  PHM.N  and KB Home  KBH.N  with "outperform"
rating for both, citing strong demand for homes  
    ** Brokerage starts PHM with PT of $52, adds that underlying
strength in housing from healthy demand and limited supply will
support Pulte's growth with strong margins 
    ** Expects housing sector to continue its upcycle based on
strong demand for properties, limited inventory of homes for
sales   
    ** Starts KBH with PT of $42, expects co's strength in core
West Coast, Texas and Southwest markets to enable it to expand
margin by an additional 350 basis points, leading to 25.3% gross
margins in 2022
    ** Also initiates coverage on D.R. Horton Inc  DHI.N  with
"neutral" rating and PT of $89, expects co to generate ROE of
33% in 2022
    ** PHM, DHI, KBH shares down 24.44%, ~29% and 26.02%,
respectively, in 2022 

 (Reporting by Nathan Gomes in Bengaluru)
 ((Nathan.Gomes@thomsonreuters.com;))