Wednesday's analyst calls: Homebuilder stock upgrade, Ferrari downgrade
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(This is CNBC Pro’s live coverage of Wednesday’s analyst calls and Wall Street chatter. Please refresh every 20-30 minutes to view the latest posts.) A major U.S. homebuilder was in focus Wednesday among analysts. KBW upgraded D.R. Horton , citing a favorable backdrop for the housing market. Shares ticked slightly higher in the premarket. Not everyone was so lucky to get an upgrade, however. HSBC downgraded Ferrari to hold from buy. The stock fell slightly on the back of the rating change. Check out the latest calls and chatter below. 5:36 a.m. ET: Shares of homebuilder D.R. Horton could continue rallying next year, says KBW Keefe, Bruyette & Woods upgraded D.R. Horton to outperform from market perform, driven by its increasingly positive outlook on homebuilders and mortgage servicers into next year. Shares of the homebuilding company have gained 56.8% this year. DHI YTD mountain DHI in 2023 “We view current housing supply/demand dynamics as favorable on net for the homebuilders and believe they have more room to run. The sector has outperformed YTD, up 65% vs. the S & P 500’s 20%. Despite the rally, valuations are below historical averages,” the firm wrote in a Tuesday note. “For homebuilders, we believe new home sales and public builderse can continue to gain share on account of land, better capitalization than private developers, and mortgage buydown incentives,” the firm wrote in a Tuesday note, adding that house prices will still remain stubbornly high and low in supply, however. “While growth is modest, existing sales will remain anemic, hovering near the lowest per capita since 1970.” — Pia Singh 5:36 a.m. ET: HSBC downgrades Ferrari The bank lowered its rating on Ferrari to hold from buy, citing limited earnings growth potential heading into the new year. “Margin improvement and cash generation are ahead of mid-term targets – 2024e EBIT consensus is already at the lower end of the 2026e targets but these targets (according to management) are unlikely to be revised before 2025,” analyst Michael Tyndall wrote. “As a result, the potential for mid-term earnings upgrades and results surprise has diminished,” Tyndall added. “We also observe that historically Ferrari has had a very small earnings surprise in 4Q, likely because it manages its deliveries in a way to achieve or slightly outperform its guidance.” Ferrari’s U.S.-listed shares have been on a tear this year, surging 73%. Earlier this week, they hit an intraday all-time high of $372.42 per share. RACE YTD mountain RACE in 2023 — Fred Imbert
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