The Irvine, CA-based company is engaged in the design, construction and sale of single-family homes.
The reduced price target follows a review of the company's 2015 fourth quarter results released in late February.
TRI Pointe reported adjusted earnings of 52 cents per diluted share, topping analysts' estimates of 46 cents per share. Revenue for the quarter was $879.7 million, surpassing Wall Street's expectations of $840.4 million.
However, Deutsche Bank said the company's surge in high margin closings during the quarter is unlikely to be repeated.
"Investor recognition of the value of a builder's land portfolio comes principally through delivered gross margins and TRI Pointe's 2015 gross margin trajectory told a compelling story with gross margins rising by more than 200 bps through the year," the firm said in an analyst note.
"However, this momentum is set to reverse in 2016 leaving overall gross margins down by 50-60 bps year-over-year due to a sharp drop-off in high value San Diego closings," Deutsche Bank added.
The company's valuation remains "overly pessimistic" against likely results, the firm noted.
Shares of TRI Pointe closed up 0.68% to $11.89 on Friday.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D+ on the stock.
This is driven by a few notable weaknesses, which should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered.
The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: TPH