Goldman Sachs initiates coverage on M.D.C. Holdings (NYSE: MDC) with a Neutral. PT $37.00.
The analyst comments, “MDC is in the later stages of its SG&A normalization plans. SG&A has grown just 10% during the last four quarters vs. a 57% increase in homebuilding revenues. Further, we expect margins to benefit from increasing prices in Phoenix, Denver, and Las Vegas. However, MDC’s land portfolio is the lightest in our coverage (the builder owns and controls 3.1 years of lots on last 12 month deliveries vs. peer average of 7.2 years) and we believe this would be a relative disadvantage during the recovery. We remain Neutral, as although the company is trading at 11.5X 2014E P/E (vs. our base of 14X), it is only in the middle of the range on both of our themes.”
For an analyst ratings summary and ratings history on M.D.C. Holdings click here. For more ratings news on M.D.C. Holdings click here. Shares of M.D.C. Holdings closed at $32.11 yesterday, with a 52 week range of $28.54-$42.41.
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