Meritage Homes (NYSE:MTH) Upgraded at Wall Street Zen

Key Points

• Wall Street Zen upgraded Meritage Homes from “sell” to “hold,” adding to a mixed analyst picture that currently stands at a consensus Hold rating with a $79 average price target.
• The company recently posted weaker-than-expected quarterly results, with EPS of $0.86 versus the $0.98 estimate and revenue of $1.12 billion versus the $1.55 billion consensus, down 17.5% year over year.
• Shares opened at $72.83, near the 50-day moving average, while institutional ownership remains very high at 98.44%; meanwhile, a top executive sold shares in May and several large investors increased their stakes.

Meritage Homes (NYSE:MTH - Get Free Report) was upgraded by stock analysts at Wall Street Zen from a "sell" rating to a "hold" rating in a report issued on Saturday.

Several other research analysts also recently weighed in on the company. Zelman & Associates downgraded Meritage Homes from an "outperform" rating to a "neutral" rating in a research note on Tuesday, July 7th. JPMorgan Chase & Co. reduced their price objective on shares of Meritage Homes from $62.00 to $58.00 and set a "neutral" rating on the stock in a research report on Tuesday, April 28th. Truist Financial set a $80.00 target price on shares of Meritage Homes and gave the stock a "buy" rating in a report on Thursday, April 16th. Weiss Ratings upgraded shares of Meritage Homes from a "hold (c-)" rating to a "hold (c)" rating in a research report on Wednesday, June 24th. Finally, The Goldman Sachs Group reaffirmed a "buy" rating and set a $93.00 target price (up from $82.00) on shares of Meritage Homes in a research note on Friday, July 10th. Five equities research analysts have rated the stock with a Buy rating and seven have given a Hold rating to the company. Based on data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus price target of $79.00.

Meritage Homes Price Performance

Shares of Meritage Homes stock opened at $72.83 on Friday. The stock's 50-day simple moving average is $72.85 and its 200-day simple moving average is $70.42. Meritage Homes has a 52 week low of $58.03 and a 52 week high of $85.38. The company has a market capitalization of $4.86 billion, a price-to-earnings ratio of 13.36, a PEG ratio of 3.17 and a beta of 1.35. 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 (NYSE:MTH - Get Free Report) last released its quarterly earnings data on Wednesday, April 22nd. The construction company reported $0.86 earnings per share for the quarter, missing analysts' consensus estimates of $0.98 by ($0.12). Meritage Homes had a return on equity of 8.08% and a net margin of 6.86%.The business had revenue of $1.12 billion during the quarter, compared to the consensus estimate of $1.55 billion. During the same period last year, the company earned $1.69 EPS. The business's revenue was down 17.5% on a year-over-year basis. As a group, analysts expect that Meritage Homes will post 5 earnings per share for the current fiscal year.

Insider Activity

In other news, CAO Alison Sasser sold 1,273 shares of the company's stock in a transaction that occurred on Tuesday, May 12th. The stock was sold at an average price of $62.11, for a total transaction of $79,066.03. Following the sale, the chief accounting officer directly owned 7,634 shares of the company's stock, valued at $474,147.74. This represents a 14.29% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 2.50% of the stock is owned by company insiders.

Institutional Investors Weigh In On Meritage Homes

Several large investors have recently bought and sold shares of the business. Royal Bank of Canada lifted 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 valued at $2,740,000 after purchasing an additional 22,162 shares during the last quarter. AQR Capital Management LLC raised its position in shares of Meritage Homes by 51.7% during the 1st quarter. AQR Capital Management LLC now owns 12,937 shares of the construction company's stock valued at $917,000 after buying an additional 4,407 shares in the last quarter. Goldman Sachs Group Inc. raised its position in shares of 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 valued at $75,051,000 after buying an additional 391,297 shares in the last quarter. Empowered Funds LLC lifted its holdings in shares of Meritage Homes by 111.0% in the 1st quarter. Empowered Funds LLC now owns 32,971 shares of the construction company's stock valued at $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 lifted its holdings in shares of Meritage Homes by 102.8% in the 1st 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 acquiring an additional 161,806 shares during the last quarter. Institutional investors 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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