M.D.C. Holdings upgraded to Buy from Neutral at Seaport Research

Seaport Research upgraded M.D.C. Holdings to Buy from Neutral with a $49 price target. The firm’s analysis of 10 bond de-inversion cycles since 1957 supports a more negative macro outlook and its “seemingly counter-intuitive” upgrades of homebuilders as it sees out-performance both into, and out of, de-inversion, the analyst tells investors. In its upgrades of the group, the firm cites attractive sector valuation, low gross/net leverage, low existing inventory tailwinds, and record high home price to income and low affordability. While acknowledging fundamental headwinds are rising, the firm sees a historically favorable environment for “early cycle” builders.