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Most Homebuilders Could be M&A Targets in 2020, Wedbush Says

Dec. 10, 2019, 2:14 PM

Every homebuilder besides D.R. Horton and Lennar may be a possible acquisition candidate next year as scale matters and companies will need to bulk up to compete with DHI and LEN as well as new “heavyweights” like Berkshire Hathaway’s Clayton Homes, Wedbush analyst Jay McCanless wrote in a note.

  • Several of Wedbush’s covered builders are trading at or below the FY20 estimate average price/book multiple of 1.2x; most notable are outperform-rated Century Communities and outperform-rated Taylor Morrison, which trade at 0.8x and 0.9x Wedbush’s FY20 book value respectively; valuation range for recent public M&A in the space has been between...

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