Investors should buy homebuilder shares such as Toll Brothers and Lennar because housing sales are surging this spring, according to Raymond James, which reiterated its strong buy ratings on both stocks.
“The 2017 spring selling season is off to a robust and better-than-expected start for most U.S. homebuilders, based on several recent data points and our own feedback received from our travels this spring,” analyst Buck Horne wrote in a note to clients Thursday.
“Accordingly, ahead of the upcoming 1Q17 earnings season, we are upwardly revising and updating EPS estimates and target prices across our homebuilding coverage list.”
February pending homes sales rose 5.5 percent for the month, the second-fasted pace in more than 10 years, according to the National Association of Realtors. In addition, home sales increased about 9 percent in March compared with the previous year, according to a new report from Redfin.