Taylor Morrison begins $50M accelerated share buyback

Taylor Morrison Home Corp (NYSE:TMHC), a Scottsdale, Arizona-based homebuilding company with a market capitalization of $6.3 billion, has entered into an accelerated share repurchase agreement (ASR) with Mizuho (NYSE:MFG) Markets Americas LLC, as part of its ongoing $1 billion share repurchase program. On Monday, the company initiated the repurchase of $50 million worth of its common stock. According to InvestingPro analysis, the stock is currently trading below its Fair Value, and management has been consistently executing share buybacks to enhance shareholder value.

According to the terms of the ASR agreement, Taylor Morrison paid the repurchase price today and received shares equivalent to 80% of the repurchase price based on the closing share price as of last Friday, February 21, 2025. The final number of shares to be repurchased will be determined by the volume-weighted average price of the common stock during the term of the ASR agreement, factoring in a discount and adjustments as per the agreement’s terms.

The settlement of the ASR agreement is anticipated to be completed by the second quarter of 2025. This move is part of Taylor Morrison’s strategy to return value to shareholders under the previously announced share buyback plan.

This transaction follows the operative builder’s commitment to strategically manage its capital, aiming to enhance shareholder returns. The company’s decision to engage in this ASR reflects confidence in its financial strength and long-term business strategy.

The information disclosed in this article is based on the company’s recent SEC filing. Taylor Morrison Home Corp has not provided any additional comments on the potential impact of the buyback on its financial position or market performance.

In other recent news, Taylor Morrison Home Corp reported strong fourth-quarter results for 2024, with an adjusted earnings per share (EPS) of $2.64, surpassing the forecast of $2.40. The company’s revenue reached $2.36 billion, exceeding expectations of $2.11 billion. Following these results, analysts have made adjustments to their stock price targets for the company. Raymond (NSE:RYMD) James reduced its price target from $84 to $74 while maintaining an Outperform rating, and BTIG adjusted its target from $86 to $83, reiterating a Buy rating. The earnings beat was attributed to higher delivery volumes and reduced sales, general and administrative expenses.

Taylor Morrison’s strategic focus on diversified consumer segments and community locations has contributed to its resilience in the current market. The company reported an 11% increase in unit orders, surpassing BTIG’s estimate, and a 40% year-over-year increase in website traffic. The company’s guidance for 2025 includes home closings between 13,500 and 14,000, with a gross margin of 23% to 24%. Analysts from BTIG highlighted that Taylor Morrison remains their top pick in the homebuilding sector, citing its product mix that caters to less rate-sensitive customers.

Taylor Morrison also boasts a strong cash flow position, with a substantial land inventory to support ongoing share repurchases. The company plans significant share repurchases valued between $300 million and $350 million in 2025. Despite potential challenges such as lot price inflation and tariff impacts, the company’s strategic positioning and financial health are expected to provide a buffer against market pressures. Investors are looking forward to further insights during Taylor Morrison’s Analyst Day on March 6.

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