Goldman Sachs Positive On Homebuilders Ahead of Earnings/Tax Credit Extension (XHB, DHI, MTH, TOL)

Goldman Sachs is making positive comments on the Homebuilders (NYSE: XHB) today into earnings and an expected extension of the federal tax credit.

For earnings, the firm expects three key things will be visible in the data and commentary: 1: home prices remain stable in many markets; 2. builders are approaching profitability; 3. sales trends are improving.

The firm also said there is a "strong likelihood" that the federal tax credit on housing will be extend before the November 30 expiration.

The firm's favorites names into the earnings are DR Horton (NYSE: DHI) and Meritage (NYSE: MTH) which are both on the Conviction Buy List. The firm also said they would be buyers of Toll Brothers (NYSE: TOL).

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