Morgan Stanley Mostly Lukewarm On Homebuilders

Amid a downdraft for homebuilder stocks Thursday, an analyst launched coverage on the sector with a series of mostly lukewarm ratings.

Morgan Stanley launched coverage of Lennar Corporation LEN, rating the company at Outperform and painting a $54 price target.

Earlier, Lennar beat fourth-quarter earnings expectations, but like KB Home KBH on Wednesday, warned of narrower 2015 profit margins.

Lennar changed hands recently down more than 5 percent at $43.40; KB was off nearly 7 percent at $12.61.

Morgan Stanley initiated coverage on KB Thursday with an Underweight rating and $14 target.

Other homebuilders rating new coverage from Morgan Stanley, all at Equal-Weight, include Toll Brothers Inc TOL with a $39 target; D.R. Horton, Inc. DHI at a $27.50 price target and PulteGroup, Inc. PHM with a $24 target.