UPDATE: J.P. Morgan Upgrades Beazer Homes USA to Overweight, Raises PT on Highly Attractive Valuation

In a report published Friday, J.P. Morgan analyst Michael Rehaut upgraded the rating on Beazer Homes USA

from Neutral to Overweight, and raised the price target from $21.00 to $25.50. In the report, Rehaut noted, “BZH currently trades at 0.8x adj. P/B (ex-adj. FAS 109) vs. the group's 2.1x average, as well as 4.8x our updated 2016 Earnings Power (and a still attractive 6.0x assuming 25% dilution in an equity issuance scenario) vs. the group's 8.3x average. As a result, we view BZH's valuation as highly attractive, and we believe the company's likely turn to profitability in FY14 represents a solid positive fundamental catalyst for the stock over the next 6-12 months, as this should create additional visibility for a material improvement in EPS over the next 2-3 years. Thus we rate the stock Overweight relative to its peers.” Beazer Homes USA closed on Thursday at $18.52.