Smith Douglas Homes downgraded to Underperform at BofA on slower growth

As previously reported, BofA downgraded Smith Douglas Homes (SDHC) to Underperform from Neutral with a price target of $22, down from $33. Smith Douglas, like other builders, faces headwinds from cost inflation while net price remains under pressure from higher mortgage rates, the analyst tells investors. However, the valuation “does not appear compelling” relative to other builders given expectations that Smith’s delivery growth moderates in 2025 and return on equity continues to normalize closer to the group average, the analyst added.