PulteGroup Inc

The 30-year fixed mortgage rate rose to 6.49% this week, according to Freddie Mac, up from below 6% in February. The increase follows a jump in the 10-year Treasury yield, driven by geopolitical tensions and inflation concerns. Home prices hit a record median of $440,600 in June, further straining affordability. Major homebuilder stocks including Lennar, D.R. Horton, PulteGroup, and NVR have all declined over the past week. Goldman Sachs estimates a shortage of 3 million to 4 million homes, and while new legislation aims to ease land-use restrictions, relief is unlikely until mortgage rates fall.

PulteGroup is set to report second-quarter earnings on Wednesday, July 22, before the market opens, with analysts forecasting earnings of $2.38 per share, a 21.5% year-over-year decline. The company has beaten estimates in three of the past four quarters, though last quarter it missed expectations with a 30.4% drop to $1.79 per share. Looking further ahead, analysts see fiscal 2026 earnings per share easing by 13% to $9.95 before rebounding by 10.3% to $10.97 in fiscal 2027. Despite the softer earnings outlook, PulteGroup shares have climbed 30.7% over the past year, outpacing the S&P 500 Index's 19.9% gain and the SPDR S&P Homebuilders ETF's 16.4% return, with a 17.9% year-to-date advance in 2026. The stock holds a consensus Moderate Buy rating from 16 analysts, with a Street-high price target of $162 implying 17.7% upside from current levels.

PulteGroup's Del Webb brand broke ground on a resort-style clubhouse at Del Webb Desert Retreat in Indio, California, with completion targeted for summer 2027, even as the company's latest quarter posted revenues roughly in line with expectations but softer earnings per share and declining returns on invested capital. The EPS miss and softer returns highlight profitability pressures that could challenge the investment narrative around the company's mix shift toward higher-margin active adult communities. PulteGroup's own projections imply flat yearly revenue growth to $17.7 billion by 2028 and an earnings decrease to $2.2 billion from $2.7 billion today, while the most optimistic analysts had expected revenue near $19.4 billion and earnings of $2.5 billion by 2029. Continued capital deployment into Del Webb projects ties the company's main growth opportunity to regions where affordability and demand trends can cut both ways, and if incentives stay elevated and homebuyer demand weakens further, pressure on margins and returns could intensify.

StockStory analysts are cautious on PulteGroup, citing three concerns. Revenue grew just 1.2% annually over the past two years, below its five-year trend, while earnings per share fell 7.7% annually over the same period. Return on invested capital has also declined, suggesting fewer profitable growth opportunities. The stock trades at 12.2 times forward earnings, or $122.97 per share, and has returned only 1.1% over the past six months, trailing the S&P 500's 10.9% gain.

PulteGroup reported first-quarter revenues of $3.41 billion, a 12.4% decline from a year earlier, in line with analyst expectations but accompanied by a miss on earnings per share estimates. The results were part of a mixed quarter for the 12 home builders tracked, whose aggregate revenues missed consensus estimates by 0.6%. Taylor Morrison Home stood out with revenues of $1.39 billion, down 26.8% year on year but beating expectations by 4.1%, while NVR posted the weakest performance with revenues of $1.88 billion, down 21.7% and missing estimates by 7.8%. KB Home reported revenues of $1.08 billion, down 22.6% and missing estimates by 1.8%, and D.R. Horton reported revenues of $7.56 billion, down 2.3% and slightly below expectations. On average, the group's share prices have risen 2.9% since their latest earnings releases.

Lennar Corporation is maintaining large-scale home deliveries but faces persistent margin and pricing pressure heading into 2026. The company delivered 20,519 homes in the second quarter of fiscal 2026, up 2% from a year earlier, while new orders slipped 4% to 21,749 homes. However, the average sales price fell 5% to $371,000, and gross margin on home sales declined to 15.6% from 17.8%, reflecting affordability-driven incentives and weaker revenue per home. Management reduced its full-year delivery target to approximately 82,000 to 83,000 homes, citing interest rate and geopolitical uncertainty, and guided for third-quarter gross margins of roughly 16%. Lennar's asset-light land strategy, with about 98% of homesites controlled through third parties, offers some balance-sheet flexibility but has not yet translated into stronger earnings power or improved stock appeal.