D.R. Horton and MDC removed from Buy list at KeyBanc

|About: D. R. Horton Inc. (DHI)|By:, SA News Editor

"Longer-term we believe builders have upside, but now offer only moderate risk-adjusted upside if 2014 meets expectations, with greater downside potential amid rising rates or lower than expected growth," says analyst Kenneth Zener, throwing in the towel on Buy ratings for D.R. Horton (DHI) and MDC Holdings.

The stocks trade at about 2x adjusted book value, says Zener, and builders only traded above that level for 16% of the time since 1978.

His team maintains Buy ratings on Toll Bros. (TOL) and Lennar (LEN) despite the aging of the"spring" trade, but based on long-term growth prospects and their longer land positions.