Corp. Geo SAB fell the most since March after JPMorgan Chase & Co. cut the homebuilder’s rating, citing its debt and revenue growth that missed estimates.
Geo tumbled 5.1 percent, the most since March 17, to 36.41 pesos at 4 p.m. New York time. The stock was cut to “neutral” from ‘overweight’’ and assigned a 12-month price estimate of 43 pesos a share, JPMorgan analysts including Adrian Huerta wrote in a research note.
“Leverage is quite high and could be a drag for future growth,” Huerta said. “Credibility on earnings expectations is lower now as earnings in the past two years have been weaker than expected.”
Net sales rose 1 percent to 5.6 billion pesos ($465.5 million) in the fourth quarter from a year earlier, the company said in a statement to the Mexico stock exchange Feb. 16. Total liabilities rose 10 percent to 21.6 billion pesos in 2010 from a year earlier, according to the statement.