LGI Homes price target lowered to $88 from $97 at Wedbush

Wedbush lowered the firm’s price target on LGI Homes to $88 from $97 and keeps a Neutral rating on the shares. The firm believes the competitive threats from larger, entry level companies are forcing LGI to maintain incentives at current levels, be price competitive in select instances, and to spend more money on the marketing side to generate more leads. Management indicated on the Q4 call that appraisal issues were occurring in certain markets due to aggressive pricing for new entry level homes near certain LGI subdivisions. As a result of those competitive dynamics and LGI’s FY24 unit closing guidance coming in below Wedbush’s prior forecast, the firmis trimming its EPS estimates and price target.