Goldman Sachs Resumes Hovnanian Enterprises (HOV) at Sell

Goldman Sachs resumes coverage on Hovnanian Enterprises (NYSE: HOV) with a Sell. PT $5.50.

The analyst comments, "We expect the company to grow slower than peers during the recovery (orders growth of 14%/10% yoy during 2013/2014 vs. peers 25%/21% yoy). Hovnanian is one of the last homebuilders to break even (except Beazer), doing so during 2Q2013 versus others during 2012. The company has a negative book value (excluding its DTA which has yet to reverse) and high leverage (net debt to capital of 155%) รข factors we expect to limit land acquisition to meet growing demand. Further, we do not expect the company to generate material free cash flow before 2016, which could potentially lead to earnings-dilutive equity raises or higher-interest debt raises."

For an analyst ratings summary and ratings history on Hovnanian Enterprises click here. For more ratings news on Hovnanian Enterprises click here. Shares of Hovnanian Enterprises closed at $5.59 yesterday, with a 52 week range of $2.23-$7.35.

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