Meritage Homes (NYSE:MTH) Price Target Cut to $58.00 by Analysts at JPMorgan Chase & Co.

Key Points

• JPMorgan lowered its price target on Meritage Homes from $62 to $58 and kept a "neutral" rating, implying roughly a 15.9% downside from the prior close.
• Quarterly results disappointed: Meritage reported $0.86 EPS vs. $0.98 expected and $1.12B revenue vs. $1.55B expected, with revenue down 17.5% year‑over‑year.
• Insider selling amid heavy institutional ownership: the CEO and EVP sold shares recently (47,622 shares sold over 90 days) while hedge funds and other institutions own about 98% of the stock, with several large managers adding positions.

Meritage Homes (NYSE:MTH - Get Free Report) had its price objective cut by analysts at JPMorgan Chase & Co. from $62.00 to $58.00 in a note issued to investors on Tuesday,Benzinga reports. The brokerage currently has a "neutral" rating on the construction company's stock. JPMorgan Chase & Co.'s price target would indicate a potential downside of 15.92% from the company's previous close.

MTH has been the topic of several other reports. Wall Street Zen downgraded Meritage Homes from a "hold" rating to a "sell" rating in a research report on Saturday, April 11th. Truist Financial set a $80.00 target price on Meritage Homes and gave the stock a "buy" rating in a research report on Thursday, April 16th. Citizens Jmp assumed coverage on Meritage Homes in a research report on Wednesday, January 7th. They set a "market outperform" rating and a $90.00 target price on the stock. Citigroup began coverage on Meritage Homes in a research report on Wednesday, January 7th. They set an "outperform" rating on the stock. Finally, Zacks Research upgraded shares of Meritage Homes from a "strong sell" rating to a "hold" rating in a report on Monday, April 13th. One research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and seven have assigned a Hold rating to the company. Based on data from MarketBeat.com, Meritage Homes presently has a consensus rating of "Moderate Buy" and an average price target of $79.89.

Meritage Homes Trading Down 1.1%

Shares of NYSE MTH traded down $0.75 during midday trading on Tuesday, reaching $68.99. 514,877 shares of the stock were exchanged, compared to its average volume of 1,015,095. The company has a market capitalization of $4.60 billion, a P/E ratio of 12.66, a P/E/G ratio of 1.60 and a beta of 1.50. Meritage Homes has a 52-week low of $58.03 and a 52-week high of $84.74. The company has a current ratio of 1.96, a quick ratio of 2.10 and a debt-to-equity ratio of 0.36. The stock has a 50 day moving average price of $67.25 and a 200-day moving average price of $69.43.

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 analysts' consensus estimates of $0.98 by ($0.12). The business had revenue of $1.12 billion during the quarter, compared to analysts' expectations of $1.55 billion. Meritage Homes had a net margin of 6.86% and a return on equity of 8.08%. Meritage Homes's revenue for the quarter was down 17.5% on a year-over-year basis. During the same period in the prior year, the firm earned $1.69 EPS. Equities research analysts expect that Meritage Homes will post 5.64 earnings per share for the current fiscal year.

Insider Activity

In other news, EVP Javier Feliciano sold 3,580 shares of Meritage Homes stock in a transaction that occurred on Monday, February 23rd. The shares were sold at an average price of $76.24, for a total transaction of $272,939.20. Following the sale, the executive vice president owned 44,935 shares in the company, valued at $3,425,844.40. This trade represents a 7.38% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CEO Phillippe Lord sold 32,820 shares of Meritage Homes stock in a transaction that occurred on Monday, February 23rd. The shares were sold at an average price of $76.49, for a total transaction of $2,510,401.80. Following the sale, the chief executive officer owned 260,389 shares in the company, valued at $19,917,154.61. This represents a 11.19% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 47,622 shares of company stock worth $3,640,273 over the last 90 days. Company insiders own 2.50% of the company's stock.

Hedge Funds Weigh In On Meritage Homes

A number of institutional investors and hedge funds have recently added to or reduced their stakes in MTH. Norges Bank purchased a new position in Meritage Homes in the 4th quarter valued at about $63,053,000. Capital World Investors increased its holdings in Meritage Homes by 44.3% during the 3rd quarter. Capital World Investors now owns 1,987,850 shares of the construction company's stock worth $143,980,000 after purchasing an additional 609,866 shares during the last quarter. Balyasny Asset Management L.P. increased its holdings in Meritage Homes by 58.9% during the 2nd quarter. Balyasny Asset Management L.P. now owns 1,423,013 shares of the construction company's stock worth $95,299,000 after purchasing an additional 527,265 shares during the last quarter. Vaughan Nelson Investment Management L.P. purchased a new stake in Meritage Homes during the 3rd quarter worth approximately $37,477,000. Finally, Goldman Sachs Group Inc. increased its holdings in Meritage Homes by 58.6% during the 1st quarter. Goldman Sachs Group Inc. now owns 1,058,850 shares of the construction company's stock worth $75,051,000 after purchasing an additional 391,297 shares during the last quarter. 98.44% of the stock is owned by hedge funds and other institutional investors.

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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