Evercore ISI downgrades Meritage Homes to In-Line, PT lowered to $82.

Evercore ISI downgrades Meritage Homes to In-Line, PT lowered to $82.

In a recent development, Evercore ISI has downgraded Meritage Homes to In-Line from Outperform, with the price target (PT) lowered to $82 Housing weakness due to poor demand not supply, says Evercore^[1]. The downgrade reflects broader concerns within the housing sector, particularly regarding sluggish demand rather than supply constraints. The firm's analysis suggests that while mortgage rates have fallen, consumer sentiment and broader economic uncertainty have kept buyers on the sidelines.

Evercore ISI attributes the weak demand to recent policy shifts, including tariffs and immigration changes, which have negatively impacted potential homebuyers. The brokerage also cautions that government efforts to boost homebuilding could backfire by adding pressure to prices and margins rather than stimulating demand.

The downgrade comes as part of a broader trend, with Evercore ISI also downgrading other major U.S. homebuilders such as D.R. Horton, KB Home, PulteGroup, Toll Brothers, and Tri Pointe Homes Housing weakness due to poor demand not supply, says Evercore^[1]. The firm expects margins for builders to trough in the fourth quarter, with a modest recovery anticipated in 2026. However, Evercore ISI remains cautious, noting that third-quarter results are unlikely to serve as a catalyst for stock performance.

In the long term, Evercore ISI believes that these stocks could rerate to higher multiples as companies prioritize prudent capital allocation and returns over growth. Nevertheless, the firm expects some digestion in the immediate horizon, with margins needing to bottom before stocks can rerate Evercore ISI says Trump policies aren't helping the housing market. It just downgraded 6 homebuilders^[2].