PulteGroup price target lowered to $165 from $168 at Oppenheimer

Oppenheimer lowered the firm’s price target on PulteGroup (PHM) to $165 from $168 and keeps an Outperform rating on the shares as the firm updated its model for Q3 earnings reported on October 22. Oppenheimer notes EPS was ahead of the Street, but Q4 gross margin guidance disappointed. Management highlighted incremental incentive activity and mix as reasons for the reduction. The firm suspects this will be a trend as other builders report earnings the next few weeks. Though PulteGroup offers a compelling long-term story, the stock is likely pressured near term as investors digest the possibility of a lower gross margin trajectory, says Oppenheimer.