The lower price target comes after the Red Bank, NJ-based builder of residential homes posted weaker-than-expected results for the 2016 first quarter earlier this month.
The company reported a loss of 11 cents per share, wider than the loss of 3 cents per share that analysts had expected.
Revenue climbed by 29.1% to $575.6 million year-over-year, but missed analysts' estimates of $580.3 million.
"The highlight of Hovnanian's F1Q16 earnings was the firm's continued focus on generating cash flow. The company announced further land banking and asset sales...With guidance for a decline in revenues through 2018, the firm is liquidating part of its business to further generate cash flow," Deutsche Bank said in an analyst note.
Due to the company's balance sheet issues and lack of growth, the firm maintains its "hold" rating.
Shares of Hovnanian closed up by 2.74% to $1.50 on Tuesday.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D+ on the stock.
This is driven by some concerns, which should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered.
The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: HOV