UPDATE: Compass Point Upgrades Hovnanian Enterprises to Neutral on Reduced Risk
Compass Point upgraded Hovnanian Enterprises (NYSE: HOV) from Sell to Neutral and raised the price target from $3.50 to $5.50.
Compass Point said, "While we remain concerned regarding HOV's footprint and its price points, the company's risk profile has greatly declined over the past few quarters and the potential for sustainable profitability in 2014 exists. However, despite the strength of the housing recovery and HOV's ability to refinance its significant debt maturities, we anticipate that the company will not achieve a positive book value until its DTA is reversed in perhaps 2015-2016. We continue to value HOV's equity purely on the basis of the present value of the DTA using a 15% discount rate and a 2-year earn back period."
Hovnanian Enterprises closed at $5.93 on Monday.
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