Meritage Homes falls after Truist cuts to 'hold', trims PT on major homebuilders
MTH•Brokerage sees limited near-term catalysts
The brokerage said MTH lacks near-term catalysts and sees no imminent recovery in the entry-level housing market.
Truist also said large owned-land portfolios could make Meritage and KB Home acquisition targets.
Meritage Homes falls after Truist downgrade
Shares of U.S. homebuilder Meritage Homes MTH.N fell 2.3% to $64.25 premarket after Truist downgraded the stock to "hold" from "buy" and cut its price target to $72 from $80.
Truist said the new target still implies a 9.5% upside over the last close.
Higher rates seen pressuring incentives and margins
Truist said rising mortgage rates could prompt homebuilders to increase incentives through 2027, weighing on pricing power and profitability.
Peer price target cuts and homebuilder index performance
Truist also reduced price targets for some peers:
| Company | New PT | Old PT |
|---|---|---|
| D.R. Horton | $140 | $150 |
| Lennar | $75 | $80 |
| KBH | $55 | $56 |
As of the last close, the S&P 1500 Homebuilding index had fallen 6.4% year to date.
