Smith Douglas Homes downgraded to Neutral from Overweight at JPMorgan

JPMorgan downgraded Smith Douglas Homes (SDHC) to Neutral from Overweight with a price target of $36, down from $41. The firm views the stock’s relative valuation against its lowered 2025 estimates following the company’s initial guidance for next year “as reasonable if not somewhat full.” While Smith Douglas raised its 2024 closings guidance midpoint by 3%, its initial 2025 guidance featured closings growth of 8%-15% and gross margins down 125 points year-over-year versus JPMorgan’s prior estimates of up 32% and down 70 points, respectively, the analyst tells investors in a research note.