NVR - PulteGroup NVR stocks upgraded at UBS on durable outlook for homebuilders

UBS analyst John Lovallo upgrades homebuilders PulteGroup (PHM -2.0%) to Buy and NVR (NVR -0.6%) to Neutral as he sees the homebuilding sector retaining strength for the next few years. "If the market can gain comfort with the fact that housing volume could crest at a high level over the next few years and still support a period of elevated earnings well past 2023, even if not to the extent that sell-side consensus forecasts, we believe a meaningful re-rating in the group could occur," Lovallo wrote in a note to clients. Nevertheless, homebuilder stocks weaken in early Thursday trading. The iShares U.S. Home Construction ETF (BATS:ITB) falls 1.6%. He raises his price target on Pulte (NYSE:PHM) to $70 from $63, based on a 7.5x price/earnings multiple on his 2023 EPS estimate. He expects that the stock's current P/E of 5.8x more than reflects potential moderation of industry growth and peak

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PulteGroup, NVR stocks upgraded at UBS on durable outlook for homebuilders