UBS cuts Hovnanian to 'Neutral'
NEW YORK (AP) — A UBS analyst said Wednesday that Hovnanian shares may not rise much farther.
Hovnanian Enterprises Inc., like other home builder stocks, has been on fire. It's up nearly 400 percent over the past year and reached a new four-year high of $7.43 in Wednesday trading.
In a note to investors analyst David Goldberg cut his rating on Hovnanian, lowering it to "neutral" from "buy." The main reason, Goldberg wrote, is that Hovnanian's stock is probably leveling off.
Goldberg pointed out that Hovnanian has climbed 34 percent since late November, while housing stocks as a group rose 4 percent. He set a 12-month price target of $7.50 for Hovnanian.
Goldberg also raised his earnings estimate for the Red Bank, N.J.-based company. He now sees Hovnanian making 25 cents per share in fiscal 2014, up from a previous estimate of 15 cents per share.
Hovnanian shares were up 14 cents, or 2 percent, to $7.14 in afternoon trading.
Investors piled into housing stocks in 2012, as sales of new homes rebounded. They are up 15.3 percent over the past year, hitting a seasonally adjusted annual rate of 377,000 in November. The pace of home construction is nearly 22 percent higher than a year ago, with builders on track to start work on the greatest number of homes in four years.