NVR (NVR) Rating Lowered to Sell at Zacks Investment Research

NVR (NYSE:NVR) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued to investors on Wednesday.

According to Zacks, “NVR is poised to gain traction in 2018 on the current positive housing scenario. Unlike other homebuilders, NVR’s sole business is selling and building quality homes by typically acquiring finished building lots, without the risk of owning and developing land in a cyclical industry. NVR’s disciplined business model and focus on maximizing liquidity and minimizing risk are likely to generate more returns for shareholders. Though homebuilding gross margin was 19.2% in 2017, an improvement of 170 bps year over year, gross margin pressure is likely to pose a threat over the next several quarters owing to cost pressure. Moreover, shares of the company have underperformed the industry in the past year. Estimates for 2018 have also remain unchanged over the past 60 days, limiting upside potential for the stock.”

Other analysts also recently issued reports about the stock. JPMorgan Chase & Co. reissued a “$2,892.50” rating and issued a $3,100.00 price target (down from $3,450.00) on shares of NVR in a research note on Monday, July 23rd. MKM Partners lowered their price target on shares of NVR to $3,100.00 and set a “neutral” rating for the company in a research note on Friday, August 3rd. Finally, ValuEngine downgraded shares of NVR from a “hold” rating to a “sell” rating in a research note on Monday, July 30th. Two research analysts have rated the stock with a sell rating, three have given a hold rating and one has assigned a buy rating to the stock. The stock currently has an average rating of “Hold” and an average price target of $3,341.50.

NVR stock opened at $2,543.25 on Wednesday. The company has a quick ratio of 1.40, a current ratio of 3.67 and a debt-to-equity ratio of 0.37. The firm has a market capitalization of $9.28 billion, a price-to-earnings ratio of 17.97, a price-to-earnings-growth ratio of 0.90 and a beta of 0.48. NVR has a twelve month low of $2,520.10 and a twelve month high of $3,700.00.

NVR (NYSE:NVR) last posted its quarterly earnings results on Friday, July 20th. The construction company reported $49.05 earnings per share for the quarter, topping the consensus estimate of $46.21 by $2.84. The business had revenue of $1.75 billion during the quarter, compared to the consensus estimate of $1.82 billion. NVR had a net margin of 9.86% and a return on equity of 45.41%. The firm’s revenue for the quarter was up 15.7% on a year-over-year basis. During the same period in the previous year, the firm posted $35.19 earnings per share. equities analysts anticipate that NVR will post 189.18 EPS for the current fiscal year.

NVR announced that its board has authorized a stock repurchase program on Wednesday, August 1st that allows the company to repurchase $300.00 million in shares. This repurchase authorization allows the construction company to repurchase up to 3% of its shares through open market purchases. Shares repurchase programs are usually a sign that the company’s leadership believes its stock is undervalued.

In other news, insider Jeffrey D. Martchek sold 1,000 shares of the company’s stock in a transaction dated Tuesday, August 21st. The shares were sold at an average price of $2,727.09, for a total transaction of $2,727,090.00. Following the completion of the transaction, the insider now directly owns 5,198 shares of the company’s stock, valued at $14,175,413.82. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, Director Eddie Arthur Grier sold 108 shares of the company’s stock in a transaction dated Wednesday, August 1st. The shares were sold at an average price of $2,722.12, for a total transaction of $293,988.96. Following the transaction, the director now directly owns 193 shares of the company’s stock, valued at $525,369.16. The disclosure for this sale can be found here. Insiders sold 2,108 shares of company stock valued at $5,734,359 over the last three months. 11.30% of the stock is currently owned by insiders.

Several large investors have recently modified their holdings of the company. Advisors Asset Management Inc. raised its stake in shares of NVR by 150,961.3% during the second quarter. Advisors Asset Management Inc. now owns 335,356 shares of the construction company’s stock valued at $487,000 after acquiring an additional 335,134 shares during the last quarter. FMR LLC raised its stake in shares of NVR by 2.3% during the second quarter. FMR LLC now owns 90,721 shares of the construction company’s stock valued at $269,473,000 after acquiring an additional 2,004 shares during the last quarter. Bank of New York Mellon Corp raised its stake in shares of NVR by 10.5% during the second quarter. Bank of New York Mellon Corp now owns 51,059 shares of the construction company’s stock valued at $151,664,000 after acquiring an additional 4,845 shares during the last quarter. Old Mutual Global Investors UK Ltd. raised its stake in shares of NVR by 22.6% during the first quarter. Old Mutual Global Investors UK Ltd. now owns 45,200 shares of the construction company’s stock valued at $126,560,000 after acquiring an additional 8,345 shares during the last quarter. Finally, Northern Trust Corp raised its stake in shares of NVR by 3.1% during the second quarter. Northern Trust Corp now owns 42,575 shares of the construction company’s stock valued at $126,461,000 after acquiring an additional 1,270 shares during the last quarter. 78.05% of the stock is owned by hedge funds and other institutional investors.

About NVR

NVR, Inc operates as a homebuilder in the United States. The company operates through four segments: Mid Atlantic, North East, Mid East, and South East. It primarily constructs and sells single-family detached homes, townhomes, and condominium buildings under the Ryan Homes, NVHomes, and Heartland Homes names.

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