Timing is Everything

Today shortly after the close our good friends at streetaccount.com posted the following news:
16:18 Deutsche Bank initiates homebuilding sector: CTX, DHI, HOV, LEN, TOA, and TOL Centex (CTX) and Lennar (LEN) are initiated buy with targets of $67 and $56. DR Horton (DHI), Hovnanian (HOV), Technical Olympic (TOA), and Toll Brothers (TOL) initiated hold with targets of $25, $32, $11, and $30.

Less than an hour later Centex lowered guidance dramatically:

Tim Eller, Centex Corporation Chairman and CEO, said, “The housing market continues to adjust rapidly and Centex is executing its balanced approach to effectively manage these transitions. Cancellation rates that were well outside of historical levels diminished our earnings visibility this quarter. We continue to focus on generating cash and on positioning ourselves for strategic reinvestment as business conditions improve. We will provide additional information about our second quarter results in our quarterly conference call and press release.”

Centex Reports Preliminary Second Quarter Results (Yahoo)

Centex closed the after hours trading session at $52.32, down $2.77 from its $55.09 4pm close.

Tomorrow we would expect the hapless Deutsche analyst to:

A) Call in sick and take a 3-day weekend

B) Downgrade the stock to hold and lower his price target in the quickest flip-flop in Wall Street history

C) Pretend like nothing happened when he shows up in the office and deflect attention from his gaffe by talking incessantly about the Mets game

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