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Investing.com - Oppenheimer has raised its price target on PulteGroup (NYSE:PHM) to $132.00 from $125.00 while maintaining an Outperform rating on the homebuilder’s stock. According to InvestingPro data, the company trades at an attractive P/E ratio of 7.9x and maintains a "GREAT" overall financial health score, with analyst targets ranging from $98 to $165.
The firm lowered its estimates for PulteGroup ahead of second-quarter 2025 earnings to reflect additional pressure on sales volume as the company balances pace and price in the current market environment.
Oppenheimer noted that the recent increase in PulteGroup’s share price presents some near-term risk, as the demand backdrop has deteriorated since first-quarter earnings reports, and Wall Street’s estimates for 2025 may be too optimistic.
Despite these concerns, Oppenheimer believes market sentiment toward PulteGroup stock is already negative, potentially limiting downside risk.
The firm continues to view PulteGroup favorably due to its sector-leading return on equity (ROE) of 26% and diversity in its buyer base, factors that support the maintained Outperform rating despite near-term challenges. For deeper insights into PulteGroup’s financial health and valuation metrics, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, PulteGroup has seen a series of developments that may interest investors. Fitch Ratings has revised PulteGroup’s Long-Term Issuer Default Rating outlook to Positive, affirming it at ’BBB+’ due to the company’s successful land-light strategy and strong financial metrics. Meanwhile, Raymond (NSE:RYMD) James has adjusted its price target for PulteGroup to $115 from $135, maintaining an Outperform rating, while UBS has lowered its target to $141 from $151, keeping a Buy rating. Barclays (LON:BARC) has also decreased its price target to $98 from $100, maintaining an Equalweight rating, citing concerns over PulteGroup’s strategy of reducing housing starts.
PulteGroup’s recent performance included a notable first quarter for 2025, leading to adjustments in earnings per share estimates by UBS. The company is projected to achieve a return on invested capital of 17% and operating cash flow surpassing $1.3 billion for the year, according to Raymond James. Fitch anticipates PulteGroup to generate significant cash flow from operations and maintain strong EBITDA margins, despite some expected declines. The company’s diverse customer base and strategic geographical spread are highlighted as strengths by analysts.
Debra W. Still, Vice Chair of Pulte Financial Services, is set to retire at the end of 2025 after a 42-year career with PulteGroup, having significantly expanded the company’s financial services. Eric Hart will continue to lead Pulte Financial Services following Still’s departure. Despite industry pressures, PulteGroup’s EBITDA margins remain among the highest for Fitch-rated homebuilders.
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