NEW YORK (TheStreet) -- TheStreet's Jim Cramer says Toll Brothers (TOL) is rising because home builders' orders were terrific, gross margins are great, buyers are paying more for homes and the company's development projects are doing well, specifically the Brooklyn development.
But Cramer says the main takeaway is if the 10-year treasury note keeps declining, then Toll Brothers will keep climbing. He adds declining interest rates are fantastic for home builders, especially high end ones such as Toll. Cramer says he is counting on the housing sector's move upward to continue because he believes mortgage rates will drop below 4%, which is why he likes Toll.
TheStreet Ratings team agrees, as it rates Toll Brothers as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate TOLL BROTHERS INC (TOL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, growth in earnings per share, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."