The firm lowered the price target to $18.50 from $23.50 for the Atlanta-based homebuilding company.
JPMorgan Chase said it lowered Beazer Homes USA's rating because, "BZH's 4Q (Sept-end) results and issuance of FY15 guidance, the latter of which drives our materially lowered FY15-FY16 EPS estimates (FY15 lowered using the same tax rate)."
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Separately. TheStreet Ratings team rates BEAZER HOMES USA INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BEAZER HOMES USA INC (BZH) a SELL. This is driven by some concerns, which we believe 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 we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally high debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Household Durables industry. The net income has significantly decreased by 113.5% when compared to the same quarter one year ago, falling from -$5.79 million to -$12.36 million.
- The debt-to-equity ratio is very high at 7.02 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- The gross profit margin for BEAZER HOMES USA INC is rather low; currently it is at 19.40%. Regardless of BZH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -3.48% trails the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Durables industry and the overall market, BEAZER HOMES USA INC's return on equity significantly trails that of both the industry average and the S&P 500.
- In its most recent trading session, BZH has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- You can view the full analysis from the report here: BZH Ratings Report