Compass Point Research & Trading upgraded Hovnanian Enterprises, Inc. HOV from Neutral to Buy and maintained its price target of $4 in a report issued Monday.
The upgrade from analysts Wilkes Graham and Megan Dunleavy was based on the company's "track record for being an outperformer during sector bounces and the recent underperformance of the stock."
Overall, the analysts expressed that there is room for growth and that "weak housing data points observed YTD have disappointed the home builder sector, but have also brought about hope for the 2015 spring selling season as investors expect widening credit availability in 2015 and beyond."
The report concluded that "decelerated growth in 2014 versus both 2012 and 2013 has led to compressed home builder valuations, which we believe sets up the space for multiple expansions via the Hope Trade into 2015."
Hovnanian Enterprises, Inc. recently traded at $3.23, down 2.1 percent.
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