PulteGroup (PHM) PT Raised to $139 at BTIG

BTIG analyst Carl Reichardt Jr. raised the price target on PulteGroup (NYSE: PHM) to $139.00 (from $133.00) while maintaining a Buy rating.

The analyst comments "PHM reported 2Q24 headline EPS of $3.83 and adjusted EPS of $3.58, ahead of our $3.30 estimate ($3.27 consensus). PHM saw a combined $0.25/sh benefit from an insurance settlement & tax resolution. Higher gross margin, deliveries, ASP, & financial services PTI plus lower SG&A/sales relative to our est. all contributed to the beat. Orders, however, fell 4% vs. our +7% est. (+6% consensus). Mgmt tone was cautious; traffic and order flow were choppy in 2Q, though traffic has been "solid" in July. Move-up demand seems more resilient than entry level for PHM, but we note incentives fell 20 bps sequentially, indicating to us that PHM is not chasing volume while reiterating its oft-stated intent not to be "margin-proud". Indeed, full-year 2024 guidance was largely maintained, with GMs still 28.5-29.0% in 2H (and the guide does not contemplate lower rates -- nor a significant economic contraction, to be fair); incremental 3Q guidance was in line with our model. All in, this was a strong quarter save for orders and we expect PHM's return profile to remain comfortably above peers in the intermediate term. We are adjusting our EPS estimates; 2024 increases to $13.60 from $13.05 on the beat while 2025 slides to $14.00 from $14.10 as we assume softer volumes partially offset by a more aggressive share buyback. We maintain our Buy rating and increase our PT to $139 from $133."

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