UPDATE: JP Morgan Upgrades MDC Holdings to Neutral
JP Morgan upgrades MDC Holdings (NYSE: MDC) to Neutral from Underweight and raises its price target to $22 from $17.50 a share as the company's EPS appears to be turning the corner despite concerns that remain.
JP Morgan says, "we are upgrading MDC to Neutral from Underweight, based on our view that the company has sufficiently “turned the corner” in terms of both industry lagging order growth and EPS, and as such, given its still solid valuation discount to its peers, believe further underperformance relative to the group is unlikely. Importantly, we believe the drivers of the stock's material relative underperformance over the last two years – down 7% in 2010 and 39% in 2011, below our universe average (ex-MDC) of +6% and -18%, respectively (S&P:+13% and flat) – have begun to be addressed and also are now more appropriately reflected in its valuation."
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