UPDATE: Sterne Agee Initiates Taylor Morrison Home with Buy on Rising Demand

In a report published Wednesday, Sterne Agee analyst Jay McCanless initiated coverage on Taylor Morrison Home Corp. TMHC with a Buy rating and $29.00 price target. In the report, McCanless noted, “TMHC IPO priced at the top end of the range and management sold more stock than outlined in the pre-IPO prospectus. TMHC priced 28,572,000 shares of stock at $22 on April 10, and an additional 4,285,800 shares are available for over-allotments. The shares priced at the top of TMHC's projected $20 to $22 range, and TMHC sold approximately 20% more shares than projected in the pre-IPO prospectuses. TMHC is expanding as demand for new housing rises. TMHC has forecast 50.0% Y/Y community count growth in FY13 and 30% Y/Y in FY14. The nearest competitors expect approximately 20.0% net community count growth for FY13. We expect TMHC's planned openings can produce order and closing growth in FY13 ahead of the group average because consumer housing demand appears to be ahead of the supply of new and existing homes and also appears to be ahead of the market's capacity to create new homes.” Taylor Morrison Home Corp. closed on Tuesday at $23.48.