Investing.com — Wedbush upgraded PulteGroup Inc (NYSE: ) to “outperform” from “neutral” given the stock's strong depreciation and strong growth factors. Shares were up 2.1% at $110.
Pulte stock has fallen about 27% since hitting a record high of $149.47 on October 18, although it has gained 2% over the same period. Wedbush expects lower mortgage rates and improved credit availability through 2025 to support homebuilder growth.
The firm raised Pulte's Q4 earnings estimate to $3.29 per share, above Refinitiv's consensus estimate of $3.28, on expectations of strong domestic closings. It also raised FY25 and FY26 EPS estimates to $14.58 and $16.29, respectively, citing mid-single-digit revenue growth from a higher base in FY24.
Wedbush highlighted Pulte's strong capital return strategy, including more than $1.5 billion in authorized stock repurchases through 2024, and its balance sheet, which is expected to move to a net cash position by the end of FY24.
The brokerage sets a price target of $135, based on 2 times its FY25 price target of $68.28. Despite trading below peers, Wedbush views Pulte as undervalued due to its financial strength and expected growth.