Credit Suisse Reiterates Underperform Rating, Raises Price Target On Ryland Group As Margin Expectations Still Seem Optimistic

In a report published Friday, Credit Suisse analyst Michael Dahl reiterated an Underperform rating on Ryland Group Inc (NYSE: RYL), and raised the price target from $34.00 to $35.00.

In the report, Credit Suisse noted, “We are raising our EPS est. to $3.29 for '15 (from $2.94) and $3.31 for '16 (from $3.06). Our increased EPS ests. are driven a combination of higher gross margins ($0.23/shr in '15), better SG&A expectations ($0.14/shr in '15) and a lower tax rate ($0.10/shr in '15), while a lower homebuilding revenue est. provides a partial offset in '15 ($0.10/shr). We increase our target price to $35 (from $34), but continue to see downside risk to consensus ests. and maintain our Underperform rating.”

Ryland Group closed on Thursday at $39.62.