"Unfortunately, we believe the U.S. housing market is in a downward cycle just entering a recession, and we don't expect to see signs of a housing recovery any time soon," Leon said in his reports., chief financial officer of Taylor Morrison, told analysts in the homebuilder's third quarter earnings call on Oct. 26 that he feels confident that the company is prepared for market changes.
"We believe we are well positioned operationally and financially to navigate the current market environment and uncertainty ahead," he said."Our capital allocation priorities are based on a disciplined framework that balances our operational and growth objectives with the help of our balance sheet as we seek to generate attractive returns for our shareholders."
Wolfe Research — which uses a rating system of underperform, peer perform and outperform — issued a peer perform rating to Taylor Morrison and Meritage. "With virtually every builder reporting anemic West order results — particularly Phoenix/Arizona and Colorado, we are keeping a keen eye on the region as it created plenty of impairment turmoil during the prior cycle," according to a Wolfe Research report.
"While I am by no means a stock market analyst, I am a housing expert, having spent over 20 years in the business," Brophy said. In rising rate environments, like the one we are in, we typically see housing, and affiliated, stocks take hits on the day-to-day ebb and flow of both investor interest and ire.