NEW YORK (TheStreet) -- CalAtlantic Group (CAA) , formerly Standard Pacific Corp., stock coverage was initiated with a "sector weight" rating at KeyBanc Capital Markets on Wednesday.

The Irvine, CA-based home-builder has a national and diversified position in the U.S. housing market after its merger earlier this year, analysts at KeyBanc said in a note.

The company's exposure to the California and western regions is well-positioned amid slowing in other regions, according to KeyBanc.

"CAA's larger footprint post the merger is well diversified regionally, with no region representing more than ~30% of EBIT," the analysts said, adding that the company's third quarter results in November will offer greater clarity on the stock.

Shares of CalAtlantic Group were up 0.21% to $42.10 in early afternoon trading on Wednesday.

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Separately, TheStreet Ratings team rates CALATLANTIC GROUP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate CALATLANTIC GROUP INC (CAA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CAA's revenue growth has slightly outpaced the industry average of 12.6%. Since the same quarter one year prior, revenues rose by 18.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The debt-to-equity ratio of 1.29 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Household Durables industry and the overall market, CALATLANTIC GROUP INC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CAA