Considerable Long-Term Upside Potential For Beazer Homes (BZH)
Analyst Josh Levin of Citigroup initiates coverage of Beazer Homes (NYSE: BZH) with a "buy" rating. The target price for BZH is set to $6.25.
According to Citigroup, “BZH faces both operational and financial challenges. On the homebuilding side, we think BZH is a below average operator. BZH's gross margins and inventory turns have trailed the peer group average while its SG&A as a percentage of revenues has recently exceeded the peer group average. On the financial side, even after factoring in the recent equity issuance and the company's tax refund, we think BZH's balance sheet remains highly leveraged with around 61% net debt-to-cap compared to the peer group average of ~29%.“
Citigroup’s earnings analysis indicates that there is considerable upside for Beazer Homes’ stock for investors “who are confident that BZH will survive.” “According to Bloomberg, across the Street there are 5 Holds, 2 Sells and no Buy ratings,” the analyst mentions.
