TMHC - Taylor Morrison upped to Outperform at Credit Suisse despite tough housing backdrop

Taylor Morrison ( NYSE: TMHC ) stock is rising over 2% in Monday morning trading after Credit Suisse analyst Dan Oppenheim upgraded the homebuilder to Outperform from Neutral despite a difficult near-term housing backdrop.

Oppenheim pointed out that Taylor Morrison's ( TMHC ) moves to boost margins "and its efforts in controlling orders and working with buyers to strengthen its backlog will enable the company to maintain strong earnings" even in a rising interest rate environment, he wrote in a note to clients.

Specifically, the company has "focused on aligning its orders and construction cycle to avoid having its backlog extend too far into the future given the construction and supply chain difficulties," Oppenheim explained. That shorter backlog "limits some of the risk of cancellations from higher mortgage rates and the uncertain environment," he added.

And cancellations are expected to get reduced as Taylor Morrison ( TMHC ) works with buyers on extended rate locks, the note said.

Likewise, SA's Quant Rating screens Taylor Morrison ( TMHC ) shares as a Strong Buy, with the best marks in valuation and momentum. And the Average Wall Street Analyst views TMHC as a Buy (2 Strong Buy, 2 Buy, 6 Hold).

In mid-June, Taylor Morrison cut to Neutral at B. Riley on rising interest rates .

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