UPDATE: Sterne Agee Initiates Coverage on NVR with Buy Rating, $1,100 PT on Share Undervalue

In a report published Wednesday, Sterne Agee analyst Jay McCanless initiated coverage on NVR NVR with a Buy rating and $1,100.00 price target. In the report, McCanless noted, “We are initiating coverage of NVR with a Buy rating. We view NVR as a consistently profitable homebuilder, and at current levels, we view the shares as undervalued for investors with a long-term time horizon. Our $1,100 price target represents an approximate 15.0x P/E multiple on our FY14E EPS of $74.77. We are valuing NVR at the bottom of our 15.0x to 20.0x FY14 P/E range because we expect NVR's strategic avoidance of standing inventory may result in uneven near-term order growth in a supply-starved housing market. On a longer-term basis, we view the shares as undervalued at current levels assuming additional housing supply enters the market later in the cycle.” NVR closed on Tuesday at $1,000.00.