Another day, another new low for the homebuilders' sector. The ISE Homebuilders Index (RUF) is currently showing a 3.2% loss and has pegged a new annual low. Additionally, the index is rapidly approaching a move into single-digit territory.
Citigroup blazed a path through the sector ahead of the open, issuing a hearty handful of downgrades. Here's a listing of the financial concern's moves and today's impact on the underlying stocks:
- Centex (CTX) cut to hold from buy, down 5.5% to new 52-week low
- DR Horton (DHI) cut to hold from buy, down 4.4%
- KB Home (KBH) cut to hold from buy, down 5.6% to new 52-week low
- Lennar (LEN) cut to hold from buy, down 4.2% to new 52-week low
- Pulte Homes (PHM) cut to hold from buy, down 2.8%
- Ryland Group (RYL) cut to hold from buy, down 5.0%
- Standard Pacific (SPF) cut to hold from buy, down 4.9%
- Meritage Homes (MTH) cut to sell from hold, down 2.5%
Hold ratings were left untouched on Beazer Homes (BZH), Hovnanian Enterprises (HOV), and Toll Brothers (TOL).
Covering analyst Stephen Kim noted that he doesn't anticipate positive data from the residential housing market until the second quarter of next year. In a statement to clients, Kim said While we continue to believe that long-term investors will do well owning the home builders over the next few years, the current overhang of resale inventory and subprime-rate resets appear to make historical trading and valuation analyses of limited utility for predicting near-term performance in the group.