PHM - Century Communities raised to Buy Green Brick Partners cut to Neutral at B. Riley

2023-06-26 11:15:57 ET

B. Riley analyst Alex Rygiel upgraded shares of Century Communities ( NYSE: CCS ) to Buy from Neutral on Monday on the basis of improving demand trends, particularly across the first-time homebuyer group. The stock gained 1.6% in late morning trading.

"We believe there could be upside to our 2H23 and 2024 estimates, especially within gross margins and, to a lesser extent, revenue," Rygiel wrote in a note, thanks to stronger new home sales as well as housing starts and building permits .

"New communities can initially sell at a faster pace and as such, the strong new community opening pace could be a positive catalyst to higher than expected new orders," he added.

The Buy rating diverges from the SA Quant system rating and the average Wall Street analyst rating, both at Hold.

On the other side of the fence, the sell-side analyst downgraded Green Brick Partners ( NYSE: GRBK ) to Neutral from Buy, as the stock's ~116% year-to-date surge means "only modest upside" going forward.

That's despite the fact that it "remains one of our favorite homebuilders given its attractive geographic exposure to high-growth markets, land inventory position (particularly in in-fill locations), integrated land development strategy, past performance to its business model and future growth plans."

Conversely, SA analyst Damon Judd earlier this month rated GRBK as a Buy as the company kicked off the year with record home closings revenue and a high homebuilding gross margin for Q1.

In SA's homebuilder stock screener , GRBK was the highest-rated one, followed by M/I Homes ( MHO ) and PulteGroup ( PHM ).

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