UPDATE: Bank of America Initiates Coverage on LGI Homes on EPS/Stock Price Upside

In a report published Monday, Bank of America analyst Michael A. Roxland initiated coverage on

with a Buy rating and $19.00 price target. In the report, Bank of America noted, “We initiate coverage of LGI Homes with a Buy rating and $19 price objective, which implies a 23% total return. With forecast revenues of around $225mn in 2013, LGI originally started out as a Texas homebuilder, but has subsequently expanded operations into Arizona, Georgia and Florida. The company IPO'd on November 13, selling 10.35mn shares to investors at $11/share. LGI prides itself on a sales and marketing culture that is customer focused. As a result, the company has been able to consistently demonstrate strong order growth and industry-leading margins as renters buy into LGI's home ownership value proposition. Meantime LGI's “land agnostic” approach (no preference for being long land or land light) affords it a competitive advantage, as LGI tends to go further out from prime locations where other builders tend to compete given its targeted client base (price sensitive so they're willing to travel a little more to a city center) and as long as project returns are attractive.” LGI Homes closed on Friday at $15.40.