Barclays Reiterates an 'Overweight' on PulteGroup (PHM); Short-Term Pain, May Equal Long-Term Gain

Barclays reiterates an 'Overweight' on PulteGroup (NYSE: PHM) price target of $8.00.

Barclays analyst says, "Over the past 15 years, Pulte has consistently generated EBITDA margins below its peer group, and we believe this represents the greatest challenge and the greatest opportunity for the stock over the next few years. Perhaps most encouragingly, we believe the company has taken the important first step of acknowledging its underperformance, has then spent time analyzing the causes and is now beginning to take concrete steps to reverse the situation."

"We continue to believe that this issue represents a near-term overhang - but not a long-term threat - to the stock. Pulte's future putbacks would require an additional $410mn of reserves, which, while not a paltry sum, is far less than the $1.143bn in cash that the company currently holds."

For more ratings news on PulteGroup click here and for the rating history of PulteGroup click here.

Shares of PulteGroup closed at $5.41 yesterday.

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