From Standard & Poor's Equity Research
AG Edwards downgraded Standard Pacific (SPF
) to hold from buy.
Analyst Gregory Gieber wasn't surprised with the company's preliminary April and May sales data, given its significant inventory overhang and falling fundamental demand in the industry. However, he notes that the company's data was far worse than he had expected. What homebuilding industry is going through appears to be much more brutal than most had anticipated even just a few months ago, he says. He believes the soft landing theory is dead. He cut his 2006 earnings per share (EPS) estimate by 10% to $5.65 and 2007's by 20% to $4.50.