- Homebuilder stocks are broadly lower after Barclays (LON:BARC) issues a round of downgrades, saying expectations have run up too high as key indicators including moderating buyer traffic trends show limited upside even as demand remains robust.
- Barclays downgrades Toll Brothers (TOL -2.2%) to Underweight from Equal Weight, and cuts Lennar (LEN -2%), PulteGroup (PHM -1.6%) and TRI Pointe Homes (TPH -2%) to Equal Weight from Overweight; KB Home (KBH -0.7%), Meritage Homes (MTH -1.4%) and Realogy Holdings (RLGY -0.7%) are reiterated at Underweight, but CalAtlantic (CAA +0.4%) is upgraded to Equal Weight from Underweight because of the stock's recent underperformance vs. the group.
- "Our June A.G.E.N.T. Survey indicated moderating buyer traffic trends, warning of risk that near-term catalysts for builders will disappoint relative to rising expectations," according to analyst Michael Dahl, who also sees margin headwinds in land, labor and material costs.
- Among other names in the sector: KBH -0.8%, DHI -0.9%, HOV -4.5%, BZH -1%, LGIH -1.2%.
- ETFs: ITB -0.8%, XHB -0.6%.
- Now read: KB Home Still Has Foundation For Continued Price Momentum
Original article