UBS Remains Sidelined on CalAtlantic Group (CAA) Following 2Q EPS Beat

UBS reiterated a Neutral rating on CalAtlantic Group (NYSE: CAA), and raised the price target to $40.00 (from $35.00), following the company's 2Q earnings report. CalAtlantic reported EPS of $0.87, ahead of a $0.77 forecast. Unit orders declined 1% YOY vs. +8% forecast as the North's +25% partially offset the Southwest's -24%.

Analyst Susan Maklari commented, "CalAtlantic reported 2Q EPS of $0.87—adjusted for $5mn of expense associated with the merger of Standard Pacific and Ryland—vs. our $0.77 forecast. The outperformance was driven by increased operating leverage as the HB EBIT margin (incl. amortized interest) was ~90bps ahead of our estimate, a ~$0.06 benefit to EPS. Further, on a pro-forma basis, HB revenue growth of 17% YOY (+12% in units and 5% in ASP) compared to our 12% estimate (+6% in units and 6% in ASP), adding ~$0.04. Finally, a slightly lower tax rate was offset by weaker financial services profit."

For an analyst ratings summary and ratings history on CalAtlantic Group click here. For more ratings news on CalAtlantic Group click here.

Shares of CalAtlantic Group closed at $39.73 yesterday.

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