The Long-Term Prognosis for PulteGroup, Inc. (PHM)

Analysts at Buckingham Research, assumed coverage of PulteGroup, Inc. (NYSE:PHM) with Neutral recommendation, according to their opinion released on January 11. RBC Capital Mkts analysts have downgraded their rating of PHM stock from Sector Perform to Underperform in a separate flash note to investors on January 11. Analysts at KeyBanc Capital Mkts issued an upgrade from Sector Weight to Overweight for the stock, in a research note that dated back to January 07.

By watching the trading activity of corporate insiders, it will become easier to get a sense of PulteGroup, Inc. (NYSE:PHM)’s prospects. The earliest insider trade took place on 08/27/2018. Anderson Brian P parted with a total of 5 thousand shares of company at average share price of $28.96. The total for the sales was set at $144.8 thousand. After this transaction, the Director account balance stood at 101.24 thousand shares. The stock lost -1.31 percent since that insider sale. On 05/11/2018, Smith Harmon D, EVP & COO, sold 51.72 thousand shares at a price per share of $31.4. This removed 1.62 million shares from the insider’s fortune and the stock saw a -8.98 percent retreat in value since the news became public. This transaction left 263.04 thousand shares in the EVP & COO account. On 05/11/2018, Director Hawaux Andre J performed a purchase transaction worth $97.06 thousand. This purchase at $31.31 each has added 3.1 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded -8.72 percent decrease since the transaction was reported. The insider now is left with 51.65 thousand shares remaining in the account. Smith Harmon D, who performs the EVP & COO job, sold 1.05 thousand shares for $32.73 thousand. The disposal occurred on 05/08/2018 was priced at $31.32 per share. The share price plunged -8.75 percent since the reporting date. Smith Harmon D now left with a stake of 314.75 thousand PHM stock worth $9 million after the insider selling.

PulteGroup, Inc. (PHM) is expected to jump by -5.98 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $32-month high price target. This represents a whopping 11.97 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $27, which represents a return potential of -5.53 percent when compared to the closing price of the stock of $28.58 on Friday, January 11. The lowest price target for the stock is $22.4 — slightly more than -21.62 percent from PHM’s current share price.

The shares are currently floating around the first support level of $28.1. Below this, the next support is placed in the zone of $27.62. Till the time, the PHM stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 68.01 on daily chart, which may remain a cause for concern. If the price breaks below $27.62 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $28.99 mark may result into a pull-back move towards $29.4 level.

PHM shares dropped -0.03 points or -0.1 percent on Friday to $28.58 with a light trade volume of 4.89 million shares. After opening the session at $28.07, the shares went as high as $28.92 and as low as $28.03, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $8.04 billion and now has 281.15 million shares outstanding. PulteGroup, Inc. (PHM) stock has gained 10.99 percent of market value in 21 trading days.

PHM stock has a trailing 3-year beta of 0.84, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $3.57 a share in the trailing twelve months. The stock’s value has surged 9.97 percent year to date (YTD) against a decline of -15.12 percent in 12 month’s time. The company’s shares still trade -18.83 percent away from its 1-year high of $35.21 and 38.47 percent up from 52-week low of $20.64. The average consensus rating on the company is 2.8, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of PulteGroup, Inc. (PHM) are trading at a P/E ratio of 7.4 times earnings reported for the past 12 months. The industry PHM operates in has an average P/E of 10.22. Its P/E ratio went as low as 3.03X and as high as 17.03 over the 5-year span. Further, it is sporting a 0.8 on the Price-to-Sales ratio. Compare this with the industry average P/S of 0.77. 23.6 percent is the gross profit margin for PulteGroup, Inc. and operating margin sits at 12.4 percent. Along with this, the net profit margin is 9.5 percent.