PHM - Meritage Homes downgraded PulteGroup upgraded on diverging H1 outlooks

Two analysts downgrade Meritage Homes (MTH) to Neutral from Buy due to the homebuilders' softer-than-expected 2021 guidance, while one of them upgrades PulteGroup (PHM) to Buy from Neutral, expecting double-digit order growth in H1 2021.Bank of America Securities analyst John Lovallo II downgrades MTH on the basis that "a slightly lower valuation multiple could be warranted as the market grapples with growing affordability concerns and peakish 2021 industry growth rates."BTIG analyst Carl E. Reichardt, Jr., also cuts MTH, pointing out that Meritage's disappointing 2021 EPS forecast of $10.50-$11.50 is due to its H1 decline in community count, which will affect order volume.Both analysts point out that the weaker outlook is a function of the homebuilders' rapid sell-through in H2 2020. That has left MTH "less able than peers to take advantage of strong selling conditions we expect this spring," Reichardt writes.Lovallo trims MTH price target to $121 from $103, while

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Meritage Homes downgraded, PulteGroup upgraded on diverging H1 outlooks