BofA Securities sets $70 target on Taylor Morrison stock

On Monday, BofA Securities began coverage on shares of Taylor Morrison Home Corporation (NYSE:TMHC) with a positive outlook, assigning a Buy rating and setting a price target of $70.00. The new coverage comes with an analysis of the company’s market position, highlighting its advantages in a challenging housing market. BofA Securities notes Taylor Morrison’s more affluent customer base and its lower exposure to entry-level buyers as key strengths. The company, currently valued at $5.9 billion, has demonstrated strong financial health with an impressive current ratio of 7.72x, indicating robust liquidity management.

The firm’s price target suggests a 19% upside potential from the current trading levels. Analysts at BofA Securities have based their price target on a 1.2X price-to-tangible book value, which they consider reasonable given Taylor Morrison’s returns on tangible equity (ROTE) compared to its peers. They pointed out that the company’s stock is trading at a significant discount of 20-30% relative to other homebuilders with similar financial metrics. This analysis aligns with InvestingPro data, which shows the stock trading at an attractive P/E ratio of 6.71x and indicates potential undervaluation. For deeper insights into TMHC’s valuation metrics and more exclusive ProTips, check out the comprehensive Pro Research Report available on InvestingPro.

The initiation of coverage acknowledges the various risks that Taylor Morrison faces in the current economic environment. These risks include a soft housing demand, persistently high mortgage rates, and the company’s exposure to the Florida market. Additionally, rising land prices and ongoing tariff uncertainties could impact the company’s performance. Despite these challenges, the company has maintained strong operational performance, generating annual revenue of $8.36 billion with a healthy gross profit margin of 24.6%.

BofA Securities’ analysis also emphasizes Taylor Morrison’s relatively strong positioning despite the broader challenges in the housing sector. By focusing on a more affluent demographic, the company may be better insulated against some of the headwinds facing the industry.

Investors and market watchers may keep a close eye on Taylor Morrison’s stock following this new coverage, as BofA Securities’ optimistic view could influence market perceptions. The firm’s assessment offers a detailed perspective on the potential growth and risks associated with Taylor Morrison as it navigates the complex housing market dynamics.

In other recent news, Taylor Morrison Home Corporation reported impressive first-quarter earnings for 2025, surpassing expectations with an adjusted earnings per share (EPS) of $2.18, compared to analyst forecasts of $1.89. The company’s revenue reached $1.8 billion, slightly exceeding the anticipated $1.78 billion. This performance was driven by a 12% increase in home closings revenue and a 25% year-over-year rise in adjusted EPS. Additionally, Taylor Morrison has entered into an accelerated share repurchase agreement to buy back $50 million of its common stock, as part of a broader $1 billion share repurchase program.

On the analyst front, BTIG raised its price target for Taylor Morrison to $79, maintaining a Buy rating, following the company’s strong first-quarter results. Conversely, Raymond (NSE:RYMD) James reduced its price target to $65 but maintained an Outperform rating, citing economic changes since early April. Despite the price target cut, Raymond James noted Taylor Morrison’s potential for approximately $350 million in share repurchases throughout the year, supported by a strong balance sheet.

The company also anticipates some margin pressure in the second quarter due to speculative inventory, yet its full-year guidance has exceeded BTIG’s projections. Taylor Morrison’s diversified consumer strategy and structural improvements continue to contribute positively to its financial performance and shareholder value.

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