Jun. 9 at 4:52 PM
Keefe Bruyette adjusted its homebuilder ratings, downgrading Lennar
$LEN to Underperform from Market Perform with a price target cut to
$86 from
$97, and upgrading Toll Brothers
$TOL to Outperform with a price target of
$161, up from
$158.
The firm says the “challenging, K‑shaped” housing market is pressuring builders tied to entry‑level buyers while those exposed to affluent, move‑up, and active‑adult segments are better positioned to defend margins.
The Lennar downgrade reflects its heavy entry‑level mix, rate‑sensitive demand, and margin headwinds tied to the Millrose land‑option structure. The Toll Brothers upgrade highlights resilient luxury demand, a long‑land inflation hedge, and improved fundamentals following its fiscal Q2 report.
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