BofA raises PulteGroup price target to $145, keeps Buy; warns 2026 may be a “reset year” for homebuilders

Yahoo
Yahoo
1h ago
BofA is more optimistic on PulteGroup’s valuation near-term (higher price target, Buy rating) but expects 2026 to be challenging for homebuilders due to demand and competitive pressures tied to macro conditions and higher inventory.
BofA raises PulteGroup price target to $145, keeps Buy; warns 2026 may be a “reset year” for homebuilders
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Key insights

  • 1

    Target raised despite cautious sector outlook: BofA increased its valuation target and maintained a Buy rating even while forecasting sector-wide pressure, implying relative confidence in PulteGroup versus peers or in longer-term prospects.

  • 2

    Inventory-driven competition highlighted as a key risk: Elevated new and resale inventory is expected to intensify competition and pressure fundamentals, suggesting pricing power and sales pace could be challenged through 2026.

  • 3

    Macro factors: employment and migration trends: The note points to weaker employment and migration trends as demand headwinds, indicating BofA sees housing demand sensitivity to labor-market conditions and population flows.

A What happened
BofA analyst Rafe Jadrosich increased the firm’s price target on PulteGroup (PHM) to $145 from $135 and reiterated a Buy rating. In a year-ahead note, the analyst said homebuilder stocks— underperforming the market in 2025—have rallied sharply year-to-date. However, BofA expects fundamentals to face pressure through 2026 due to weaker employment and migration trends, ongoing inflation, and a more competitive selling environment driven by elevated levels of new and resale inventory, characterizing 2026 as a potential “reset year for homebuilders.”

Topics

Business & Markets Real Estate Markets Economy

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