Morgan Stanley Starts PulteGroup (PHM) at Equalweight

Morgan Stanley analyst Adam Kramer initiates coverage on PulteGroup (NYSE: PHM) with a Equalweight rating and a price target of $128.00.

The analyst comments: “PHM offers a differentiated combination of scale, balanced buyer exposure, the Del Webb franchise, high mortgage capture, and an increasingly optioned land strategy. We see Del Webb growth, 3% to 5% community count expansion, pricing discipline, greater lot optionality, and continued capital returns supporting earnings durability and attractive through cycle returns despite ongoing affordability pressure.

PHM’s ability to sustain margins and ROIC remains central as elevated incentives, completed spec inventory, and higher land costs create pressure. Increasing use of land banking should improve capital efficiency over time, though at an incremental cost. Valuation ultimately hinges on whether PHM’s diversified portfolio and returns focused model merit a premium for greater through cycle durability.

We value the stocks on F2027 EPS, with implied P/B as a cross-check. Our 13x sector reference reflects the coverage group’s current NTM P/E. Given PHM’s historical discount, we apply 12.5x to F2027 EPS of $10.21, yielding our $128 PT and an implied ~1.6x P/B.”

For an analyst ratings summary and ratings history on PulteGroup click here. For more ratings news on PulteGroup click here.

Shares of PulteGroup closed at $116.06 yesterday.

You May Also Be Interested In

• Micron Technology (MU) PT Raised to $2,100 at DA Davidson as Memory Markets Expected to Further Tighten
• City Holding (CHCO) PT Raised to $145 at Keefe, Bruyette & Woods
• Morgan Stanley Starts Persistent Systems Ltd. (PSYS:IN) at Overweight