Home / Markets / Industries / Real Estate

Wednesday, November 04, 2009

Analyst Sees More Downside In Builder Stocks

By John Spence

MarketWatch Pulse

BOSTON -- Fox-Pitt Kelton analyst Robert Stevenson on Wednesday said he expects home-builder stocks to continue to lag the S&P 500 Index on lingering weakness in the housing market. "Based on our expectations that fourth-quarter housing data points will continue to be weak -- coupled with still-expensive home-builder stock valuations and the lack of significant positive catalysts -- we expect the home builders will continue to underperform the broader market in the near term," Stevenson wrote in a report to clients. He said the recent news on the $8,000 tax credit for new homebuyers, which seems likely to be renewed and possibly expanded, has already been priced into builder shares and is unlikely to provide a lift. "While we are more constructive on the home builders over a longer investment period (12-24 months), we believe the stocks have additional near-term downside and would avoid the names through year-end," the analyst wrote.

Fox Business Video

- The Crisis With 20/20 Hindsight
- Nov 21, 2009
  
  FOXBusiness.com LIVE
- Jerry Rice Talks Career
- Nov 21, 2009
  
  NFL Receiver on career on the gridiron
- John O'Hurley as Venture Capitalist
- Nov 21, 2009
  
  Comedian on life as venture capitalist
- Excess Spending in Congress
- Nov 21, 2009
  
  Saving $100 Million
- Cavuto Business Report 11-20-09
- Nov 21, 2009
  
  Business Report: Cavuto