Citizens analyst James McCanless initiated coverage of M/I Homes with an Outperform rating and $165 price target. The firm is cautious around the company's gross margins and earnings for the next three quarters, but thinks there catalysts for M/I Homes. The company has exposure to the Midwest and Plains states, which are relatively more affordable markets than the Southeast, the analyst tells investors in a research note. Second, M/I's entry level nameplate, Smart Series, continues to drive above-average gross margins while providing an affordable product, adds Citizens.
