Home Builders downgraded

You have to love the buy side analysts.   Stephen Kim had just upgraded the home building sector in October (as he was trying to pick the bottom).   
He has now downgraded the sector.  I guess this is what they mean when they say don't try to catch a falling knife.

What is even more interesting is that his prices for the stocks are above the stock current price.  So wouldn't that make this an upgrade (from the current levels)?

He cut the price target for Hovnanian from $12 to $8.  Even before todays drop, the price of HOV was 7.27.  Shouldn't the target be lower as things are getting worse and not better?

"However, although the homebuilders subsequently traded roughly in line with the S&P for a while, in just the past two weeks, amid several high-profile instances of severe distress in the financial sector, the group has underperformed the market by more than 10 percent," he wrote.

Kim said two things have made it difficult to identify the lowest point the builder stocks will reach. He pointed to the fact that "the housing cycle's downturn has not coincided with the economic cycle," and noted that the "downturn in the existing home market is lagging far behind the new home market."

It is not that housing has coincided with the economic cycle.  It is the (biggest) cause  of the current economic downturn!

http://money.cnn.com/news/newsfeeds/articles/apwire/48b4f812f315935f815a589fb8799208.htm

Disclaimer: Shorting through options - HOV, TOL, BZH, CFC.