$PHM

Morgan Stanley initiated coverage of U.S. homebuilders with a cautious view, citing affordability and margin pressures. Toll Brothers (TOL) received an Overweight rating and $159 price target, while Lennar (LEN), NVR, KB Home (KBH), D.R. Horton (DHI), and PulteGroup (PHM) were rated Underweight or Equal Weight. The bank expects flat closings and prices by 2027, with margin deterioration and earnings estimates below consensus.

Morgan Stanley initiated coverage on PulteGroup (NYSE:PHM) with an Equalweight rating and a $128 price target, citing its scale, balanced buyer exposure, and growth prospects. The stock trades at a P/E of 11.88, below the sector average. Other analysts have also issued positive ratings and higher price targets. The National Association of Homebuilders reported a rise in its Housing Market Index to 35 in August, indicating improved sentiment.

Rising Treasury yields, up to 5.2%, have pushed mortgage rates above 7%, hurting homebuilders. The iShares U.S. Home Construction ETF (ITB) fell 9.9% in a month, with D.R. Horton (DHI), PulteGroup (PHM), and Lennar (LEN) down 7%, 9.8%, and 8.1% respectively. High energy prices, U.S. debt, and tech spending are driving yields higher, with no immediate relief expected.

South Florida homebuilders report strong luxury home sales, while mid-market housing struggles due to high interest rates. GL Homes, PulteGroup, Kolter Urban, BTI Partners, and AR Homes discussed market trends, noting strong demand in Miami-Broward-Palm Beach and Naples. PulteGroup acquired a 50-acre site in Fort Pierce for $16.3 million. Rising labor and material costs due to immigration enforcement and geopolitical factors are impacting the industry.

Lennar (NYSE: LEN) missed fiscal Q3 2026 earnings estimates, reporting adjusted EPS of $1.23 on revenue of $8.05 billion. Shares fell to a 52-week low near $76.07. Other homebuilders like D.R. Horton (NYSE: DHI) and PulteGroup (NYSE: PHM) also reported weak revenue growth and rising cancellation rates due to affordability pressures and high mortgage rates. Lennar's Q4 guidance was cautious, citing labor availability, resale competition, and market conditions as challenges.

Installed Building Products (NYSE:IBP) led Q2 earnings among home builders, while NVR (NYSE:NVR) reported the weakest results with revenue down 10.5% YoY. D.R. Horton (NYSE:DHI) met revenue expectations but missed full-year guidance. PulteGroup (NYSE:PHM) beat revenue and EPS estimates despite a 9.6% YoY decline. NVR, DHI, and PHM stocks are down 3%, 4.7%, and 4.8% since reporting, respectively.

Analysts made several rating changes: Bernstein upgraded Ormat (ORA) to Market Perform, Morgan Stanley upgraded Shell (SHEL) to Overweight with a $101.30 target, Barclays upgraded W.P. Carey (WPC) to Equal Weight, Baird upgraded Sonida Senior Living (SNDA) to Outperform with a $43 target, and Piper Sandler upgraded Simmons First National (SFNC) to Overweight with a $27.50 target. Canaccord downgraded UiPath (PATH) to Hold with a $17 target, Craig-Hallum downgraded Ambarella (AMBA) to Hold with a

Analysts made several calls: Goldman Sachs reiterated Tesla as neutral, citing Cybercab's cost benefits. Bernstein kept Apple as outperform, noting market share gains. Baird upgraded Sonida Senior Living to outperform. Morgan Stanley upgraded Shell to overweight, expecting acceleration. Piper Sandler upgraded Simmons First National to overweight. Goldman upgraded Vodafone to buy. B. Riley initiated Infleqtion as buy. William Blair kept Nvidia as outperform, approving its Hugging Face acquisition

Fed Governor Waller's comments on holding rates steady sparked a market rally, with the Nasdaq up 1.4% and Bitcoin above $80,000. Analysts upgraded Shell (NYSE: SHEL) to Overweight with a $101.30 target, while downgrading Ambarella (NASDAQ: AMBA) to Hold. StoneX initiated PulteGroup (NYSE: PHM) as Buy and Lennar (NYSE: LEN) as Hold. Major indices closed higher, with the Nasdaq at 26,584, Dow at 53,686, S&P 500 at 7,747, and Russell 2000 at 2,966.

PulteGroup (PHM) declared a quarterly dividend of $0.26 per share, payable October 2, 2026, to shareholders of record on September 15, 2026. The company is a major U.S. homebuilder with operations in 45 markets.