M/I Homes Q3 revenue falls on weaker demand

Overview

• U.S. homebuilder's Q3 revenue declined 5% amid weaker demand and higher mortgage rates

• Adjusted diluted EPS for Q3 fell to $2.70 from $4.14 a year ago

• Company repurchased $50 mln of common stock in Q3

Outlook

• Company cites higher mortgage rates, weaker demand and economic uncertainty as current market conditions

• M/I Homes says it is well positioned to manage through the current cycle due to strong balance sheet

Result Drivers

• HIGHER MORTGAGE RATES - Co said increased mortgage rates contributed to weaker demand in Q3

• WEAKER DEMAND - CEO said demand declined in Q3 due to economic uncertainty and higher rates

• INVENTORY CHARGES - Co recorded $4.7 mln in pre-tax inventory charges in Q3, impacting profitability

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the homebuilding peer group is "hold."

• Wall Street's median 12-month price target for M/I Homes Inc is $172.00, about 38.6% above its October 20 closing price of $124.06

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• Oct 19 - US homebuilder sentiment tumbles to near 14-1/2-year low in October

• Oct 20 - US pending home sales tumble to record low in September

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)