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Why Toll Brothers (TOL) Outpaced the Stock Market Today

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In the latest market close, Toll Brothers (TOL - Free Report) reached $125.14, with a +1.74% movement compared to the previous day. The stock outperformed the S&P 500, which registered a daily gain of 1.11%. Meanwhile, the Dow experienced a rise of 0.8%, and the technology-dominated Nasdaq saw an increase of 1.24%.

The home builder's shares have seen an increase of 2.38% over the last month, surpassing the Construction sector's gain of 1.42% and the S&P 500's gain of 0.48%.

Analysts and investors alike will be keeping a close eye on the performance of Toll Brothers in its upcoming earnings disclosure. The company is predicted to post an EPS of $4.14, indicating a 45.26% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $2.56 billion, showing a 1.94% escalation compared to the year-ago quarter.

TOL's full-year Zacks Consensus Estimates are calling for earnings of $13.73 per share and revenue of $10.06 billion. These results would represent year-over-year changes of +11.08% and +0.66%, respectively.

Any recent changes to analyst estimates for Toll Brothers should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.06% higher. As of now, Toll Brothers holds a Zacks Rank of #1 (Strong Buy).

Looking at valuation, Toll Brothers is presently trading at a Forward P/E ratio of 8.96. This denotes a discount relative to the industry's average Forward P/E of 9.66.

One should further note that TOL currently holds a PEG ratio of 1.04. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Building Products - Home Builders industry was having an average PEG ratio of 0.92.

The Building Products - Home Builders industry is part of the Construction sector. Currently, this industry holds a Zacks Industry Rank of 45, positioning it in the top 18% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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