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Based in Atlanta, Georgia, PulteGroup, Inc. (PHM) focuses on acquiring and developing land for residential construction. Its portfolio includes single-family homes, townhomes, condominiums, and duplexes. With a market capitalization of $26.4 billion, the company operates through its Homebuilding and Financial Services divisions.
The homebuilder has outperformed the broader market over the past year. Over the past 52 weeks, PHM gained 45.5%, outpacing the S&P 500 Index’s ($SPX) 31.1% returns. In 2024, PHM is up 24.5% compared to SPX’s 24.1% gains on a YTD basis.
Narrowing the focus, PHM also outperformed the SPDR S&P Homebuilders ETF’s (XHB) 40% returns over the past 52 weeks and 20.6% gains on a YTD basis.
Despite its robust price action over the past year, PHM shares dropped over 3% on Nov. 12 as rising 10-year Treasury yields drove up mortgage rates, dampening housing demand.
Moreover, the stock dropped more than 7% after releasing its Q3 earnings on Oct. 22. Despite beating estimates with an EPS of $3.35 and revenue of $4.5 billion, the impact of rising mortgage rates weighed on investor sentiment.
For the current fiscal year, ending in December, analysts expect PulteGroup’s EPS to grow 10.4% annually to $12.94. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 16 analysts covering the PHM stock, the consensus rating is “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” and seven “Holds.”
This configuration has been relatively stable over the past months.
On October 23, Evercore Inc. (EVR) analyst Stephen Kim reaffirmed a “Buy” rating for PulteGroup with a price target of $195, which is also the Street-high price target.
PHM’s mean price target of $152.03 represents a premium of 18.3% from current price levels.
