We recently compiled a list of the 7 Stocks That Could Surge From LA Wildfires Recovery Efforts. In this article, we are going to take a look at where PulteGroup, Inc. (NYSE:PHM) stands against the other stocks.
Los Angeles wildfires continue to wreak havoc in the region, taking precious lives and destroying thousands of homes. The LA County Sheriff announced that nearly 10,000 structures were lost in the wildfires, but this number has already gone up and is expected to rise further as the authorities struggle to contain the fires.
Once the dust settles, there will be a huge demand for reconstruction of properties destroyed in the wildfires. The Biden administration has already promised federal reimbursements for the recovery efforts going on. Homebuilders could possibly benefit from this government support and the resulting spending surge as well.
To come up with the list of 7 stocks that could surge from LA wildfire recovery efforts, we considered stocks with a market cap of at least $4 billion.
Construction workers laying bricks during the residential development of multiple lots.
PulteGroup, Inc. (NYSE:PHM)
PHM operates by acquiring land and then building properties on that land, mainly for residential purposes. The company is expected to maintain strong margins through 2025 as confirmed by UBS Securities analysts just last week. The analysts upgraded the stock from Neutral to Buy based on the strength of its margins.
Analysts also believe that homebuilders like PHM have bottomed because the prevailing negativity is unlikely to continue. The lackluster demand and rising inventory should both improve in 2025, helping investors realize value in their investments.
Just last month, JPMorgan also echoed similar sentiments. The bank’s US equity analysts raised the price target on PHM to $153, a 42% upside from current levels. The increasing demand from the LA wildfire damage will likely help the stock go much further than that.
Overall PHM ranks 3rd on our list of the stocks that could surge from LA wildfires recovery efforts. While we acknowledge the potential of PHM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as PHM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article was originally published at Insider Monkey.
Hedge Fund Resource Center