- Homebuilders continue to slide as JPMorgan analyst Michael Rehaut cuts ratings on five stocks, citing rising inventories and lower affordability.
- iShares US Home Construction ETF (BATS:ITB) -0.5% in midday trading; YTD returns -15%.
- PulteGroup (PHM -0.7%) and M.D.C. Holdings (MDC -2.9%) cut to underweight, while Beazer Homes (BZH -8%), Century Communities (CCS -4.1%), and Meritage Homes (MTH -1.8%) trimmed to neutral from overweight.
- "We are becoming more cautious on the homebuilding sector," Rehaut said in a note Friday. "We expect the housing recovery to remain fairly tepid in 2019."
- He sees order growth rate softer in H2 2018 and peak gross margins over next 12 months.
- ETFs: XHB, ITB, PKB, NAIL, HOML
- Previously: Tri Pointe, William Lyons slump as analyst cuts ratings on slowing demand (Sept. 20)