Back to top

Image: Bigstock

Toll Brothers (TOL) Stock Drops Despite Market Gains: Important Facts to Note

Read MoreHide Full Article

In the latest market close, Toll Brothers (TOL - Free Report) reached $151.08, with a -0.02% movement compared to the previous day. This move lagged the S&P 500's daily gain of 0.71%. Elsewhere, the Dow saw an upswing of 1.03%, while the tech-heavy Nasdaq appreciated by 0.6%.

The the stock of home builder has risen by 7.92% in the past month, lagging the Construction sector's gain of 8.51% and overreaching the S&P 500's gain of 6.41%.

The investment community will be paying close attention to the earnings performance of Toll Brothers in its upcoming release. The company's upcoming EPS is projected at $4.30, signifying a 4.62% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $3.15 billion, showing a 4.24% escalation compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $14.52 per share and a revenue of $10.63 billion, indicating changes of +17.48% and +6.32%, respectively, from the former year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Toll Brothers. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been a 1.48% rise in the Zacks Consensus EPS estimate. Currently, Toll Brothers is carrying a Zacks Rank of #2 (Buy).

Looking at valuation, Toll Brothers is presently trading at a Forward P/E ratio of 10.41. This represents no noticeable deviation compared to its industry's average Forward P/E of 10.41.

Investors should also note that TOL has a PEG ratio of 1.13 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. TOL's industry had an average PEG ratio of 0.96 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. Currently, this industry holds a Zacks Industry Rank of 105, positioning it in the top 42% 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.

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


See More Zacks Research for These Tickers


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


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

Published in