Earnings Preview: Toll Brothers

| About: Toll Brothers (TOL)

Company Profile

Toll Brothers (NYSE:TOL), together with its subsidiaries, designs, builds, markets, and arranges finance for single-family detached and attached homes in luxury residential communities. The company is also involved, directly and through joint ventures, in projects where it is building, or converting rental apartment buildings into high-, mid- and low-rise luxury homes.

Toll Brothers is scheduled to report its second-quarter earnings results on May 23, 2012, before market open.

Technical Overview

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Toll Brothers has a market cap of $4.27 billion and is currently trading around $25.61, with a 52-week range of $13.16 to $27.80. The stock has 25.42% price performance for the year 2012. The following table provides the key financial ratios for Toll Brothers:

Key Ratio






Forward P/E


Profit Margin


Return On Assets (ROA)


Return On Equity (ROE)


Recent News

On March 5, 2012, Toll Brothers Finance Corp., a wholly-owned subsidiary of Toll Brothers, announced the final results of its registered offers to exchange new 5.875% senior notes due Feb. 15, 2022 (the "new notes") for any and all of its currently outstanding 6.875% senior notes due 2012 (the "2012 notes") and 5.95% senior notes due 2013 (the "2013 notes" and, together with the 2012 notes, the "outstanding notes").

Here's a list of recent changes to analyst ratings:

  • On May 14, 2012, Guggenheim upgraded Toll Brothers to Buy from Neutral.
  • On April 19, 2012, Deutsche Bank upgraded Toll Brothers to Buy and raised the price target from $23 to $30.
  • On April 16, 2012, Raymond James upgraded Toll Brothers to Strong Buy.
  • On April 13, 2012, KeyBanc upgraded Toll Brothers from Hold to Buy with a price target of $31.00.
  • On Feb. 23, 2012, Barclays Capital raised Toll Brothers FY 13 estimate to 0.93 from 0.92. Also, it raised the FY 12 estimate to 0.44 from 0.43.
  • On Feb. 23, 2012, RBC Capital Markets reiterated Toll Brothers at Sector Perform with $27 up from a $23 price target and increased the 2012 estimate to 0.40 from 0.35.

Analyst Guidance and Earnings History

Second-quarter revenues are expected to be $381.96 million when compared to $319.68 million for the same quarter last year. Earnings per share for the second quarter are expected to be 4 cents a share, up from a loss of 12 cents a share in the year-ago period. The average price target from analysts for Toll Brothers is $27.88, with an average rating of Overweight.

Out of the last four quarters, Toll Brothers has met or exceeded the EPS estimates two times. The following chart shows the analyst estimates history and the actual EPS results:

Sources: Some of the data is taken from Google Finance, Yahoo Finance, Finviz and investor sites.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TOL over the next 72 hours. I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.