Sector: Real Estate Ops / Property Management
Fundamentals: P/E Ratio 15.30; ROE 25%. PEG Ratio: 0.815
HXM sets a $250 million stock repurchase program, amounting to 8% of its current market capitalization. Unlike the housing market in the U.S., which is faced with weakening demand and structural challenges in mortgage financing, the Mexican homebuilding market is growing rapidly and is supported by conservative lending practices in qualifying Mexican households for a mortgage. Applying a target P/E of 19.5X to our '08 EPS estimate, a premium to US homebuilding stocks to reflect significantly faster growth in what we view as a better market, we keep our 12-mo target price at $75.
Technicals: MA(50) about to cross MA(200).
Target 1 : $61.76 (Target 2: $63.98)
Stop loss: $55.30
Next Earnings: 04/24/2008
Last Analyst Rating: Buy
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