Experts Advise Grabbing Green Brick’s Shares. Why’s That?
The stock market suffered greatly during 2020. The Covid-19 pandemic pushed lots of stocks in the red. However, the home construction industry flourished despite all hardships of the global economy. People moved out of the cities to avoid coronavirus, and they headed straightly for the suburbs and exurbs. That migration increased the demand for single-family homes.
Green Brick is one of the land development and home acquisition companies, which profited from such development. It is based in Texas and invests in real estate. After investing, the company provides plots, as well as construction financing for the development projects.
The spread of the suburbs has been good to Green Brick and not just in the past year, but also in general. The company’s Q3 revenue reached $275.8 million, showing the best results in more than a year. It beat the forecast by 20%, increasing 31% year-over-year. Besides, EPS came strong in the Q3. It was 68 cents, surpassing by 54% of analysts’ expectations.
Thanks to good reports, the stock’s share price has been climbing along with Green Brick’s financial outlook. GRBK has gained 111% during 2020.
What do the analysts say about stock?
Aaron Hecht, a JMP analyst, thinks that Green Brick will capitalize on the trend of apartment renters moving to single-family homes for safety. However, the most important cohort shift within the buyer pool is those millennials, who have come off the sidelines to buy homes. He believes that trend has multiple years of runway.
The millennial demand trend is increased in Green Brick’s case, considering its outsized exposure to those markets, which are the net beneficiaries of citizens migration out of high-priced coastal geographies.
Hecht rated this stock as a Buy. His price target of $30 implies a 23% gain over the next 12 months. Other analysts agree with Hecht as well. Green Brick’s average price target is $27.5, and it gives a 12.5% upside potential from the current price of $24.45.
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