UPDATE: J.P. Morgan Downgrades PulteGroup to Neutral on Valuation

In a report published Tuesday, J.P. Morgan analyst Michael Rehaut downgraded the rating on PulteGroup PHM from Overweight to Neutral, but slightly raised the price target from $23.00 to $24.00. In the report, Rehaut noted, “We rate PHM Neutral relative to its peers, as while we point to its moderate valuation discount to the group on an adjusted P/B basis (trading at 1.91x vs. the group's 2.05x), we note it is trading roughly in-line against our 2016 Earnings Power analysis, at 8.0x versus the group at 8.1x. Hence, we believe this relative valuation appropriately reflects our outlook for solidly below average order growth in 2013 and 2014, roughly offset by our outlook for above average margin expansion over the same period.” PulteGroup closed on Monday at $21.21.