UBS Remains Confident as Beazer Homes (BZH) Remains on Track to Drive Improved Results - Reiterates Buy

UBS maintained a Buy rating on Beazer Homes (NYSE: BZH), and cut the price target to $12.00 (from $13.00), following the company's 1Q earnings report. UBS continues to believe Beazer remains on track to drive improved results over the next few years as the current recovery in housing further unfolds. Confidence in the ongoing turnaround reflects views that management will realize its goal of balancing improved operating results with the need to deleverage its balance sheet, allowing it to narrow peer relative underperformance.

Analyst Susan Maklari commented, "Following Beazer's F1Q release, we are revising our model to reflect the near term shifts in its strategy, as it looks to take advantage of changes in the credit markets and more aggressively delever its balance sheet. Although this will allow for a greater reduction in interest expense sooner than initially anticipated there are offsets. More specifically, we have lowered our gross margin assumptions to capture the impact of the company's plans for: 1) increased spec sales; 2) greater use of land banking; and 3) more careful timing of its land purchases (mgmt. has targeted $600mn for lot acquisition and development this year). Despite the impact to our forecasts, we believe Beazer is taking the proper steps to strengthen its capital structure while maintaining its focus on longer term growth and profitability targets. As such, we maintain our Buy rating."

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

Shares of Beazer Homes closed at $8.60 yesterday.

You May Also Be Interested In

• Comerica (CMA) PT Raised to $54 at Piper Sandler
• Hydro One Ltd. (H:CN) (HRNNF) PT Lowered to Cdn$39 at CIBC
• KDDI Corp. (9433:JP) (KDDIY) PT Lowered to JPY4,520 at HSBC