So, when is that (new) SEC investigation of Merrill going to be announced?
Banc of America Securities on Tuesday downgraded two homebuilder stocks, Toll Brothers Inc. and Meritage Homes Corp., saying it was cautious on 2007 and 2008 earnings for the sector as expenses, especially land, continue to rise.
Analyst Dan Oppenheim in a research note to clients said although his estimates do not assume a housing crash, he sees profit declines for builders as costs increase faster than revenues.
Oppenheim cut his rating on Toll to sell from neutral, citing "a slower pace of sales and price appreciation along with increases in land, labor, and materials costs."
BofA said it expects demand to weaken significantly at higher price points, therefore Toll "may see more weakness than peers given its focus on the luxury segment of the market."
January 17, 2006
Posted by blogger at 1/17/2006