Meritage Homes Corporation (NYSE:MTH) Receives Average Recommendation of "Moderate Buy" from Analysts

Key Points

• Analysts have a consensus rating of "Moderate Buy" on Meritage Homes from 13 brokers (7 holds, 5 buys, 1 strong buy) with an average 12‑month target of $79.89.
• Meritage missed quarterly expectations, reporting $0.86 EPS vs. $0.98 expected and revenue of $1.12 billion (down 17.5% YoY and below the $1.55 billion estimate).
• The company raised its quarterly dividend to $0.48 (annualized $1.92, yield 2.9%), while insiders sold roughly 47,622 shares (~$3.64 million) last quarter even as several institutional investors increased stakes.

Meritage Homes Corporation (NYSE:MTH - Get Free Report) has been assigned a consensus rating of "Moderate Buy" from the thirteen brokerages that are covering the stock, MarketBeat.com reports. Seven analysts have rated the stock with a hold rating, five have issued a buy rating and one has given a strong buy rating to the company. The average 12-month target price among brokerages that have issued a report on the stock in the last year is $79.8889.

MTH has been the subject of several recent analyst reports. Citizens Jmp initiated coverage on shares of Meritage Homes in a research note on Wednesday, January 7th. They issued a "market outperform" rating and a $90.00 price objective for the company. Bank of America reduced their price objective on shares of Meritage Homes from $74.00 to $72.00 and set a "neutral" rating for the company in a research note on Monday, April 20th. Wall Street Zen cut shares of Meritage Homes from a "hold" rating to a "sell" rating in a research note on Saturday, April 11th. Keefe, Bruyette & Woods reduced their price objective on shares of Meritage Homes from $78.00 to $76.00 and set a "market perform" rating for the company in a research note on Tuesday, February 3rd. Finally, The Goldman Sachs Group reiterated a "buy" rating and issued a $90.00 price objective on shares of Meritage Homes in a research note on Tuesday, January 13th.

Meritage Homes Stock Up 0.0%

Shares of NYSE MTH opened at $66.35 on Monday. The company has a quick ratio of 1.96, a current ratio of 1.96 and a debt-to-equity ratio of 0.36. Meritage Homes has a 52 week low of $58.03 and a 52 week high of $84.74. The firm has a 50-day moving average price of $66.59 and a 200 day moving average price of $69.43. The stock has a market capitalization of $4.43 billion, a price-to-earnings ratio of 12.17, a price-to-earnings-growth ratio of 2.88 and a beta of 1.43.

Meritage Homes (NYSE:MTH - Get Free Report) last announced its quarterly earnings data on Wednesday, April 22nd. The construction company reported $0.86 EPS for the quarter, missing the consensus estimate of $0.98 by ($0.12). Meritage Homes had a net margin of 6.86% and a return on equity of 8.08%. The company had revenue of $1.12 billion during the quarter, compared to analyst estimates of $1.55 billion. During the same quarter last year, the business earned $1.69 EPS. The firm's revenue for the quarter was down 17.5% on a year-over-year basis. Equities research analysts anticipate that Meritage Homes will post 5.1 EPS for the current fiscal year.

Meritage Homes Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Tuesday, March 17th were given a dividend of $0.48 per share. The ex-dividend date was Tuesday, March 17th. This is an increase from Meritage Homes's previous quarterly dividend of $0.43. This represents a $1.92 dividend on an annualized basis and a yield of 2.9%. Meritage Homes's dividend payout ratio (DPR) is presently 35.23%.

Insiders Place Their Bets

In other Meritage Homes news, EVP Javier Feliciano sold 3,580 shares of Meritage Homes stock in a transaction dated Monday, February 23rd. The shares were sold at an average price of $76.24, for a total transaction of $272,939.20. Following the completion of the transaction, the executive vice president owned 44,935 shares in the company, valued at approximately $3,425,844.40. The trade was a 7.38% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CFO Hilla Sferruzza sold 10,928 shares of Meritage Homes stock in a transaction dated Monday, February 23rd. The stock was sold at an average price of $76.35, for a total transaction of $834,352.80. Following the transaction, the chief financial officer owned 124,961 shares of the company's stock, valued at approximately $9,540,772.35. The trade was a 8.04% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders sold 47,622 shares of company stock worth $3,640,273. Insiders own 2.50% of the company's stock.

Hedge Funds Weigh In On Meritage Homes

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in MTH. Royal Bank of Canada raised its position in Meritage Homes by 134.3% during the first quarter. Royal Bank of Canada now owns 38,658 shares of the construction company's stock worth $2,740,000 after acquiring an additional 22,162 shares during the last quarter. AQR Capital Management LLC raised its position in Meritage Homes by 51.7% during the first quarter. AQR Capital Management LLC now owns 12,937 shares of the construction company's stock worth $917,000 after acquiring an additional 4,407 shares during the last quarter. Goldman Sachs Group Inc. raised its position in Meritage Homes by 58.6% during the first quarter. Goldman Sachs Group Inc. now owns 1,058,850 shares of the construction company's stock worth $75,051,000 after acquiring an additional 391,297 shares during the last quarter. Empowered Funds LLC raised its position in Meritage Homes by 111.0% during the first quarter. Empowered Funds LLC now owns 32,971 shares of the construction company's stock worth $2,337,000 after acquiring an additional 17,343 shares during the last quarter. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its position in shares of Meritage Homes by 102.8% in the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 319,150 shares of the construction company's stock valued at $22,621,000 after buying an additional 161,806 shares during the last quarter. Institutional investors and hedge funds own 98.44% of the company's stock.

About Meritage Homes

Meritage Homes Corporation is a national homebuilder and residential developer headquartered in Scottsdale, Arizona. Founded in 1985 as Winchester Homes and later rebranded to Meritage Homes, the company specializes in designing, constructing and selling single‐family detached and attached homes. With a focus on energy efficiency and sustainable building practices, Meritage Homes markets its properties under the GreenSmart program, which integrates high‐performance features aimed at reducing long‐term energy and water consumption for homebuyers.

The company's core activities encompass land acquisition, residential community planning, home design, construction management and real estate sales.

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