UPDATE: Stifel Nicolaus Downgrades Toll Brothers to Sell

Stifel Nicolaus lowers its rating on Toll Brothers (NYSE: TOL) from Hold to Sell based on stretched valuation.

Stifel says, “TOL has recently traded just below multi-year highs and in our view has priced in a faster housing recovery than we realistically envision. We struggle to find any near term catalyst to propel the stock to new multi-year highs and believe that the seasonal pattern of buying (trading) homebuilders ahead of a potential turn in the spring came a bit early this year. We see limited valuation upside remaining and material downside risk should recent housing optimism fade.”

TOL closed at $19.69 per share on Tuesday.