Back to top

Image: Bigstock

Toll Brothers (TOL) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

Toll Brothers (TOL - Free Report) closed at $47.43 in the latest trading session, marking a +0.49% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.06%. At the same time, the Dow added 0.72%, and the tech-heavy Nasdaq gained 0.39%.

Prior to today's trading, shares of the home builder had lost 7.94% over the past month. This has lagged the Construction sector's loss of 6.53% and the S&P 500's gain of 0.17% in that time.

Investors will be hoping for strength from Toll Brothers as it approaches its next earnings release. The company is expected to report EPS of $1.57, up 55.45% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.14 billion, up 10.73% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.02 per share and revenue of $10.34 billion, which would represent changes of +51.13% and +17.6%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Toll Brothers. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.09% higher within the past month. Toll Brothers is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Toll Brothers has a Forward P/E ratio of 4.71 right now. For comparison, its industry has an average Forward P/E of 4.32, which means Toll Brothers is trading at a premium to the group.

We can also see that TOL currently has a PEG ratio of 0.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Home Builders industry currently had an average PEG ratio of 0.39 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 218, which puts it in the bottom 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TOL in the coming trading sessions, be sure to utilize

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Toll Brothers Inc. (TOL) - free report >>

Published in