NEW YORK (TheStreet) -- Barclays downgraded PulteGroup (PHM) to "underweight" from "equal weight" and lowered its price target to $20 from $21 in a note published Tuesday.
Barclays said the reason for the downgrade was because the homebuilder's shares were priced higher than they should be, and that the stock was overvalued.
"PHM, in fact, is a name that we very much like for its cautious land spend relative to peers over the past year, its strong profitability and its best-in-class balance sheet. All of these factors should allow the company to ride out any short-term gyrations in the market with greater stability, and justify a premium valuation to peers," Barclays said.
"Unfortunately," the note continued, "even after factoring in anticipated share repurchases, relatively strong margin performance, and no additional mortgage putback charges, we find Pulte shares simply too expensive to recommend at this time."
PulteGroup shares were down 0.27% to $18.89 in early trading Tuesday.
Separately, TheStreet Ratings team rates PULTEGROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate PULTEGROUP INC (PHM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow."