UPDATE: Stifel Nicolaus Upgrades D. R. Horton to Hold on Valuation, Housing Upside

Stifel Nicolaus raised its rating on D. R. Horton DHI from Sell to Hold. Stifel Nicolaus said, "We view the homebuilding sector as richly valued overall, but also see housing as in the early stages of a secular recovery and offering strong sustained tailwinds to broader economic recovery for the next three years. We expect that to support homebuilder valuations remaining robust. … As for DHI, its strong 2012 return (+56.9% vs. the S&P 500's +13.4%) was less than half that of the +123% homebuilding average. In our view the sizable valuation premium that it held a year ago for its top quality management, market share leading position, and robust balance sheet has more or less vanished." D. R. Horton closed at $20.39 on Wednesday.