Citigroup downgraded LEN and DHI to "neutral" this morning
Homebuilding stocks Lennar Corp (NYSE:LEN) and DR Horton Inc (NYSE:DHI) are lower today, after Citigroup downgraded both names to "neutral" from "buy," while also trimming their price targets to $164 from $174 and $156 from $181, respectively, due to their risk/reward ratios. LEN also was downgraded by Raymond James to "market perform" from "outperform."
Lennar stock was last seen down 2.4% to trade at $142.38, and earlier hit its lowest level since December. The equity is poised to close below its 200-day moving average today for the first time since November. The shares have now shed 17% off their March 28, record high of $172.54, but are still up 31.5% in the last nine months.
Short-term options traders have been much more bullish than usual. This is per the LEN's Schaeffer's put/call open interest ratio (SOIR) of 0.79, which sits in the low 8th percentile of its annual range.
DHI has also slipped to its lowest level since December today, down 1.2% to trade at $135.52 at last check, on track for a third-straight loss. After ceding their 160-day trendline earlier last month, the shares' 200-day moving average was breached today. Year-to-date, the stock is now down 11.8%, and 18% off its April 1 highs of $165.75.
The equity's usually quiet options pits are bursting with activity. So far today, 1,444 calls and 1,843 puts have traded hands, which is triple the average intraday volume. The most popular contract is the January 17 2025 150-strike call, followed by the June 95-strike put, with positions being opened at the latter.