Wachovia Downgrades Hovnanian Enterprises (HOV) to Underperform; Lowers Estimates
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Wachovia downgrades Hovnanian Enterprises (NYSE: HOV) to Underperform. Valuation Range: $0 to $1.
Wachovia analyst says, "HOV's shares have rebounded 353% since March 9 (versus 40% for the S&P 500). We believe HOV's value as a call option on a housing recovery is overextended, with little potential for it to create value for shareholders given a need to direct cashflow to debt paydown and our expectation of negative book equity by Q3 2009-end. While HOV has liquidity to construct units in our view, margin should continue to be substantially depressed; we expect HOV to be unprofitable for at least the next six quarters. We believe realizable value of the shares is minimal with its current capital structure. We are lowering our 2009E EPS to a loss of $8.50 and our 2010E EPS to a loss of $4.00."
To see more analyst ratings on HOV Click Here.
Hovnanian Enterprises, Inc. designs, constructs, markets and sells single-family detached homes, attached townhomes and condominiums, mid-rise and high-rise condominiums, urban infill and active adult homes in planned residential developments.
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