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The Zacks Analyst Blog Highlights: Toll Brothers, PulteGroup, KB Home, Home Depot and Lennar

 The Zacks Analyst Blog Highlights: Toll Brothers, PulteGroup, KB Home, Home
                               Depot and Lennar

PR Newswire

CHICAGO, Dec. 11, 2012

CHICAGO, Dec. 11, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Toll Brothers Inc. (NYSE:TOL),
PulteGroup, Inc. (NYSE:PHM), KB Home (NYSE:KBH), The Home Depot, Inc.
(NYSE:HD) and Lennar Corp. (NYSE:LEN).

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Here are highlights from Monday's Analyst Blog:

Is Housing Ahead of Itself?

For all its optimism, housing is still in a fragile recovery. Many millions of
homeowners have more outstanding on their mortgages than what their houses are
worth. Then, with banks still shy to lend, the Federal Government and its
housing agencies back the vast majority of home loans. Further, the
unemployment rate remains relatively high, negatively impacting home sales.

Our perusal of Zacks' outstanding recommendations for the sector reveals that
we are currently Neutral on major housing stocks pending a more broad-based
recovery.

Toll Brothers Inc. (NYSE:TOL), the nation's biggest luxury homebuilder,
recently reported a series of favorable metrics, including lower proportion of
cancellations, higher number of inked contracts and rising backlog. The stock
price is up 50.7% year to date, compared with a 12.8% return for the S&P 500.

The third quarter 2012 adjusted earnings of PulteGroup, Inc. (NYSE:PHM) of 27
cents per share beat the Zacks Consensus Estimate of 20 cents by 35% and were
significantly better than adjusted earnings of 11 cents in the prior-year
quarter. PulteGroup's cost reduction and operating efficiency improvement
initiatives led to the bottom-line beat in the quarter. The company's
homebuilding revenues rose 13.5% to $1.26 billion, driven by an increase in
number of homes closed and higher average selling prices. We are currently
Neutral on the stock. The stock is up 160.7% year to date.

KB Home's (NYSE:KBH) adjusted net loss per share of 10 cents in the fiscal
third quarter (ending August) was narrower than the prior-year quarter loss of
13 cents and the Zacks Consensus Estimate of a loss of 17 cents. Top-line
growth of 16% and margin expansion led to the reduced loss. KB Home believes
its strategic initiatives including overhead reduction, margin expansion, and
land investments in higher-priced, better-located communities, coupled with an
increasing backlog, will help it achieve profitability in the fiscal fourth
quarter and beyond. We are currently Neutral on the stock. The stock is up
118.7% year to date.

Earnings of $1.01 per share of The Home Depot, Inc. (NYSE:HD) for fiscal
second-quarter (ending July) exceeded the Zacks Consensus Estimate of 97 cents
and surged over 17% from the prior-year period, on the back of healthy comps
growth and effective cost management. Further, strong quarterly performance
prompted management to raise fiscal 2012 earnings guidance to $2.95 per share
from $2.90 forecast earlier. We are currently Neutral on the stock. The stock
is up 56.7% year to date.

Lennar Corp.'s (NYSE:LEN) fiscal third quarter (ending August) earnings per
share of 34 cents soared 209% from the year-ago earnings banking on solid
top-line and margin growth. Earnings beat the Zacks Consensus Estimate by
25.9%. Revenue climbed 34% in the quarter as Lennar benefited from pricing and
volume growth. The company witnessed solid year-over-year growth in new home
orders, average selling prices and home closings in all the three quarters of
2012. Margins have also been above average, despite rising costs, driven by
strong operating leverage. Lennar appears to be well positioned for growth for
the rest of the fiscal year. We are currently Neutral on Lennar. The stock is
up 87.8% year to date.

Lingering memories of the housing boom and bust make us view the
attractiveness of the housing sector with caution. On the other hand, we
believe that the above-mentioned surviving companies of the downturn may be
well placed to benefit from a more sustained recovery.

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