Cavco Industries (NASDAQ:CVCO) shares surged 16.5% in Friday morning trading as Wedbush analyst Jay McCanless upped the homebuilder to Outperform from Neutral following a stronger than expected fiscal Q1 as well as a pending settlement with the Securities and Exchange Commission.
The company said Thursday that it reached a settlement in principle with the SEC regarding the previously disclosed pending litigation. The SEC is expected to approve the settlement within the next 60 days, and Cavco (CVCO) doesn’t “believe that the settlement will have a material impact on our results of operations or financial position.”
“We have stayed on the sidelines waiting for this settlement, and while the situation could change, we are shifting to a more positive view on the name,” McCanless wrote in a note to clients.
McCanless also attributed his upbeat coverage to Cavco’s (CVCO) acquisition of privately held Commodore Homes last year, in addition to the company’s improvements to its legacy business. Both factors have produced three straight quarters of earnings growth ahead of his forecast, the note said.
In turn, McCanless has lifted his full-year 2023 EPS estimate to $24.05 from $18.61.
Previously, (August 4) Cavco GAAP EPS of $6.63, revenue of $588.34M.