UPDATE: JP Morgan Downgrades Standard Pacific Corp to Underweight on Valuation
JP Morgan downgraded Standard Pacific Corp (NYSE: SPF) from Neutral to Underweight and raised the price target from $6.50 to $8.00.
JP Morgan commented, "While we view SPF as a high quality builder featuring above average margins and an attractive land position, following above average performance in 2012 of 131% vs. the group's 94% (ex-HOV), we note the stock now trades at 10.5x our 2016 Earnings Power, a strong 35% premium to our universe's 7.8x average, as well as a roughly 20% premium on a P/B basis. Additionally, we estimate below average order growth in 2013 of 15% versus our universe average estimate of 19%, which we view as a relative negative from a fundamental standpoint, particularly given its more expensive valuation."
Standard Pacific Corp closed at $7.70 on Thursday.
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