In a move to execute its $1 billion share repurchase program, Taylor Morrison Home Corp (NYSE:TMHC) has entered into an accelerated share repurchase agreement (ASR) with JPMorgan Chase (NYSE:JPM) Bank, National Association. The agreement, finalized on Thursday, involves the homebuilder repurchasing $50 million worth of its common stock.
As per the ASR agreement terms, Taylor Morrison will pay the repurchase price upfront on Friday and will initially receive shares worth 80% of the repurchase price based on the stock's closing price on the same day. The final number of shares to be repurchased will be determined by the volume-weighted average price of the stock over the term of the ASR, adjusted for a negotiated discount.
The company expects to conclude the final settlement of the ASR by the first quarter of 2025. This transaction is part of a broader strategy by Taylor Morrison to manage its capital effectively and deliver value to its shareholders.
This information is based on a press release statement filed with the SEC.
In other recent news, Taylor Morrison Home Corporation has been making strides, as evidenced by recent developments. The company delivered robust third-quarter results, with revenues exceeding $2 billion, generated from the delivery of 3,394 homes.
Earnings per diluted share significantly increased by 50% year-over-year, reaching $2.37. Despite disruptions from hurricanes, the company recorded a 9% year-over-year increase in net orders.
Raymond (NS:RYMD) James and RBC Capital Markets have both expressed confidence in Taylor Morrison's potential, raising their price targets to $84.00 and $77.00 respectively. Raymond James highlighted the company's ability to adapt to varying mortgage rate scenarios and leverage its strong balance sheet to drive earnings per share growth in the fiscal year 2025.
RBC Capital Markets noted the company's operational strength and financial discipline, which could lead to an improved valuation relative to its industry counterparts.
Despite challenges such as rising mortgage rates and increased competition, especially in Texas, Taylor Morrison remains optimistic about future growth. This optimism is bolstered by sales growth in key markets and the consensus prediction that mortgage rates will drop below 6% in 2025, potentially enhancing affordability.
The company's diversified business model and resilience through economic cycles are expected to drive its performance moving forward.
InvestingPro Insights
Taylor Morrison Home Corp's (NYSE:TMHC) recent accelerated share repurchase agreement aligns with its strong financial position and market performance. According to InvestingPro data, the company boasts a market capitalization of $7.26 billion and an attractive P/E ratio of 8.54, suggesting the stock may be undervalued relative to its earnings.
InvestingPro Tips highlight that TMHC has demonstrated a high return over the last year, with a remarkable 55.89% price total return. This performance underscores the company's ability to generate value for shareholders, which is further reinforced by its share repurchase program.
Additionally, TMHC's strong financial health is evident from another InvestingPro Tip indicating that its liquid assets exceed short-term obligations. This financial stability supports the company's ability to execute significant share repurchases while maintaining operational flexibility.
For investors seeking more comprehensive analysis, InvestingPro offers 8 additional tips for TMHC, providing a deeper understanding of the company's financial position and market outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.