GRBK - Green Brick stock slides after JMP cuts on worsening housing fundamentals

Green Brick Partners ( NYSE: GRBK ) stock fell 7.1% in Friday early morning trading after JMP analyst Aaron Hecht downgraded shares of the homebuilder to Market Perform from Market Outperform on the basis of deteriorating fundamentals in the housing market.

Hecht said that Green Brick's ( GRBK ) stock price is "fairly valued" as it's trading near its all-time highs of $31.24 on December 6, 2021, implying limited upside from current levels despite posting robust Q2 results earlier in August.

While Green Brick ( GRBK ) turned in a record quarter in Q2, the broader housing market in June was stung by rising interest rates. "Going forward, we expect builders to move product by offering discounts/concessions to close affordability gaps," Hecht wrote in a note to clients.

Given Green Brick's ( GRBK ) stronger-than-expected Q2 earnings, Hecht raised his 2022 normalized EPS estimate to $5.58 from $5.01, compared with the consensus of $5.78. For 2023, though, the analyst reduced his estimate to $3.14 from $4.75 vs. consensus of $4.29.

The Market Perform rating contrasts with the Quant's Strong Buy rating, but agrees with the average Wall Street analysts' Hold rating.

Take a look at Green Brick Partners' Q2 earnings call transcript .

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