PulteGroup’s Strong Market Position and Financial Performance Drive Buy Rating

Analyst Rafe Jadrosich of Bank of America Securities maintained a Buy rating on PulteGroup (PHM – Research Report), retaining the price target of $127.00.

Rafe Jadrosich has given his Buy rating due to a combination of factors that highlight PulteGroup’s strong market position and financial performance. The company’s return on equity and capital return are attractive when compared to other builders, which supports the Buy rating. Additionally, PulteGroup’s move-up and active adult segments have outperformed the first-time homebuyer segment, which faces affordability challenges.
The Del Webb brand, catering to the luxury active adult market, offers higher gross margins and benefits from favorable municipal support, enhancing its market position. Regional performance also plays a role, with the Midwest and Northeast outperforming other areas, while PulteGroup’s strategic adjustments in speculative starts and incentives are expected to maintain its competitive edge. These factors, combined with a disciplined approach to land banking and underwriting, contribute to the positive outlook for PulteGroup’s stock.

PHM’s price has also changed moderately for the past six months – from $129.300 to $101.870, which is a -21.21% drop .