PHM - D.R. Horton PulteGroup placed on upside 30-day catalyst watch at Citi

2023-07-05 10:31:04 ET

Citi analyst Anthony Pettinar opened an upside 30-day catalyst watch on D.R. Horton ( NYSE: DHI ) and PulteGroup ( NYSE: PHM ) on Wednesday ahead of the homebuilders' upcoming earnings results.

PHM and DHI bucked the broader stock market's retreat, edging up 0.3% and 0.5% , respectively, at 10:31 p.m. ET.

For PulteGroup ( PHM ), which is slated to publish its Q2 results on July 25, Pettinar sees "modest potential upside to cons net orders of 7.1k (modelling 7.3k), supported by stronger than expected late-spring housing activity," he wrote in a note.

As for its guidance, he added, the focus among investors likely will be on the company's price trajectory and gross margin expectations.

SA contributor Hong Chew Eu last month laid out a Hold recommendation for PHM, citing no margin of safety given its cyclical properties.

Similarly, D.R. Horton ( DHI ), expected to post fiscal Q3 results on July 20, could log "modest upside to cons net orders of 21.6k, supported by a combination of stronger than expected late-spring housing activity and easier Y/Y comps," Pettinar wrote in a separate note.

He sees DHI guiding for higher deliveries for 2023 and to point to "modestly improving" gross margins.

SA's Quant system , meantime, rated DHI as a Strong Buy, while the average sell-side analyst viewed the stock as a Buy.

More on D.R. Horton and PulteGroup:

• D.R. Horton acquires assets of Truland Homes for -$100M
• What To Make Of D.R. Horton's All-Time High?
• PulteGroup Is Building Long-Term Shareholder Value

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