M.D.C. Holdings Prices $350M Debt Offering; Street Sees 25% Upside

M.D.C. Holdings on Jan. 6 priced an offering of senior notes due 2031 worth $350 million in aggregate principal amount. The notes carry an interest rate of 2.5%. Shares of the homebuilding company lost 1.3% at the close on Wednesday.

M.D.C. Holdings (MDC) plans to utilize the offering proceeds to invest in general corporate purposes. The offering is expected to close on Jan. 11 subject to closing conditions.

On Jan. 5, Merrill Lynch analyst John Lovallo downgraded the stock’s rating to Hold from Buy and cut the price target to $58 (27.4% upside potential) from $59.

According to Lovallo, M.D.C. had “among the most challenging 2021 order comps [comparables]” and comparatively higher average selling prices in a market of active entry-level and first-time buyers. (See MDC stock analysis on TipRanks)

From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 2 Buys and 4 Holds. The average analyst price target of $56.80 implies upside potential of 24.8% to current levels.

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