JPMorgan Sticks To Bearish Call On LGI Homes As June Closings Disappoint

JPMorgan analyst Michael Rehaut reiterated the Underweight rating on LGI Homes, Inc. (NASDAQ:LGIH), lowering the price forecast from $52 to $47.

On July 4, the company announced it closed on 457 homes in June 2025, lower than 571 homes in June 2024. As of June 30, 2025, LGI Homes had 146 active selling communities.

Rehaut revised his model after LGI Homes’ second quarter of fiscal year 2025 data showed 1,323 closings — below expectations — leading to EPS estimate reductions to $1.32, $5.64 and $7.20 for second quarter, full year 2025 and full year 2026, respectively; down from $1.58, $6.37 and $7.96, respectively.

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The analyst reiterated an Underweight rating on LGI Homes, pointing to its valuation as unattractive.

The stock trades at approximately 9.3x and 7.3x estimated EPS for 2025 and 2026, respectively, compared to smaller-cap peers averaging around 8.5x and 7.7x.

Its 0.6x price-to-book ratio also lags the peer average of 0.95x, amid expectations of subpar margins and one of the weakest ROEs in the sector through 2026.

The analyst's price forecast of $47 is based on a 6.5x multiple of 2026 estimated EPS.

The company plans to release financial results for the second quarter ended June 30, 2025, before the market opens on Tuesday, Aug. 5, 2025. 

According to Benzinga Pro, LGIH stock has lost over 36% in the past year.

LGIH Price Action: LGI Homes shares are trading higher by 2.26% to $53.90 at publication on Wednesday.

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Courtesy: LGI Homes