UPDATE: Toll Shares Lower Despite Upgrade from MKM Partners
MKM analyst Megan McGrath issued a note Tuesday morning making the case for a gain in shares of Toll Brothers (NYSE: TOL) amid less sensitivity to mortgage rates versus average home buyers by customers. If mortgage rates continue to be a worry for players in the housing market, according to McGrath, the company's stock may outperform.
McGrath upgraded shares of Toll from Neutral to Buy and boosted his price target on the stock from $35 to $39.
McGrath believes Toll's status as one of the more niche luxury homebuilders may become more valuable as the housing market continues to grow and lower end competition intensifies.
The MKM analyst recommends investors buy Toll shares ahead of the second half of 2013 as the stock could be pushed higher by the closing of the Touraine building.
Despite the bullish comments and upgrade, shares of Toll are down about 1 percent to $33.27 Tuesday afternoon.
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