CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We cut our 12-month target price by $11 to $87, 7x our 2024 EPS view of $12.46 (up $0.98; 2023’s up $0.35 to $11.65), a discount to the five-year forward P/E average of 7.5x. Q3 EPS of $2.90 (+7.8% Y/Y) beat by $0.08 on revenue of $4.0B (+1.5% Y/Y), $60M below consensus. PHM closed 7.1K units (+0.4% Y/Y, -6.0% Q/Q) with an average selling price of $549K (+2.0%, +2.0%), of which 48% were spec sales. Net orders of 7.1K units (+43.0%, -11.0%) were valued at $3.8B (+36.0%, -10.0%). Backlog of 13.5K units (-21.0%, flat) was valued at $8.1B (-23.0%, -1.0%). Home sale gross margin of 29.5% (-60 bps Y/Y) was aided by active-adult, spec build, and build-to-order homes. The cycle time of 140 days is expected to improve toward the 90-day pre-Covid time. PHM offered mortgage rate buy-downs to 5.75%, with 80%-85% of buyers taking incentives. 47% of Del Webb sales were paid in cash (vs. 33% two years ago). Seasonality returned to pre-Covid levels, while PHM aims to move land options to 70% long-term vs. 53% of 223K lots.