Berkshire Hathaway signed an all-cash deal worth $6.8 billion to acquire Taylor Morrison Home Corp in a first major purchase under the new CEO, Greg Abel. The US housing market is seeing an exponential shift where institutional funds are investing big in the sector. Both Berkshire Hathaway (NYSE: BRK-A) and Taylor Morrison stock (NYSE: TMHC) remain in the spotlight on Monday’s trading session. The housing company is receiving heavy exposure, rose as much as 23% to $71.75 in premarket trading in New York on Monday.
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Wolfe Research Predicts Taylor Morrison Stock Could Rise 30%, Reach New Price Target of $76
Amid the acquisition, the market analytical firm Wolfe Research provided a bullish price target for Taylor Morrison stock. According to the price prediction, TMHC could surge to a high of $76 next. Its price is currently trading in the $58.50 range and is expected to shoot up. The firm predicts that the equity could rise by another 30% from its current value.
Therefore, an investment of $1,000 could turn into $1,300 if the price prediction turns out to be accurate. Taylor Morrison stock should now be on traders’ must-watch list due to the acquisition by Berkshire Hathaway. The scalability of the company has increased, as it is now in the hands of the market’s leading investors.
Berkshire Hathaway bought Taylor Morrison stock at a premium bid of $ 72.50 per share on Friday’s closing bell. The company already paid a premium of nearly $23 per share for the acquisition. The purchase is the conglomerate’s largest transaction since it bought Occidental Petroleum Corp’s petrochemical unit earlier this year.
“We are excited to welcome Taylor Morrison into Berkshire Hathaway’s (stock) portfolio,” Abel said in a statement. “Over time, we expect to unify our site-built homebuilding operations into a combined platform enabling us to deliver the dream of homeownership to more Americans.” This is the first multi-billion dollar acquisition this year after legendary investor Warren Buffett announced his retirement.
