-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target price of $57, down $2, is 11x our 2026 EPS view of $5.22, ahead of the 10-year forward P/E mean of 7.8x, reflecting a tight resale market and TMHC's pivot back to a 15% exposure to tertiary entry-level from the current 20%-25% exposure. We believe TMHC's valuation fails to price in operational and competitive risks. We model a revenue decline for 2026, driven by falling volumes and a 300-bp gross margin contraction, as competitive overlap caps pricing power despite the positive shift to build-to-order homes. While encouraged by the recent pullback in incentives, we remain concerned this trend may wane in 2H 2026 as favorable mortgage rate comparisons fade. The primary risk is that a softening entry-level market could push larger peers to aggressively target the move-up segment, directly challenging TMHC's core strategy and testing its incentive bandwidth during its crucial community count expansion. We revise our 2026 EPS view to $5.22 from $5.89 and 2027's EPS to $6.26 from $6.73.