Earnings Preview: Toll Brothers

| About: Toll Brothers (TOL)

Toll Brothers, Inc. (NYSE:TOL), together with its subsidiaries, designs, builds, markets, and arranges finance for single-family detached and attached homes in luxury residential communities. It operates in the Residential Construction industry.

It is scheduled to report its Q2 FY2012 results on May 23, 2012, before the market opens.

Recent EPS, Actual vs. Estimates

The company has met or exceeded analyst estimates in two of the last four quarters. In the last quarter it reported a $0.02 loss per share, failing to meet analyst estimates of a gain of $0.02 per share.

Analyst Estimates

The consensus for EPS is $0.04 based on 21 analysts' estimates, up from a $0.12 loss a year ago. Revenue estimates are $382M, up from $320M a year ago. The median target price by analysts for the stock is $27.

Average recommendation: Overweight

TOL Recommendations

Source: Marketwatch

Analyst Upgrades and Downgrades

During the last 30 days, there were 3 analysts who revised this quarter's, next quarter's and this year's EPS estimates upwards and 4 analysts who revised next year's EPS estimates upwards. Also, on January 18, 2012, UBS downgraded the stock from Buy to Neutral.

Key Metrics

  • Market cap: $4.27B
  • 52 week trading range: 13.16 - 27.80
  • Trailing P/E: 127.41
  • Forward P/E: 32.83
  • P/S: 2.92
  • P/B: 1.64
  • PEG Ratio: 3.17
  • Annual dividend yield: N/A
  • Total debt: $1.62B
  • Return on Equity: 1.3%
  • Return on Assets: 1.0%

Latest Developments

  • On May 15, 2012, builder sentiment in U.S. hit its post-recession high.
  • On April 25, 2012, a permits push signals U.S. housing boom.
  • On February 17, 2012, Toll Brothers Finance Corp., a wholly owned subsidiary of Toll Brothers, Inc., announced that it has extended the early participation date relating to its registered offer to exchange new 5.875% Senior Notes due February 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) to 12:00 midnight, New York City time, on March 2, 2012, the same time as the expiration date for the exchange offer.
  • On January 5, 2012, Gibraltar Capital and Asset Management, LLC (Gibraltar) (gibraltarcapital.net), a wholly owned subsidiary of Toll Brothers, Inc. announced the closing of another private transaction with a large financial institution.
  • On November 21, 2011, Dow Jones reported that Toll Brothers, Inc. will announce on Monday the acquisition of Seattle builder CamWest Development LLC for an undisclosed cash price. The deal, which moves the luxury developer into the Pacific Northwest, is a rare example of an acquisition in the hard-hit home building sector, which continues limping through the worst housing downturn in decades.

Insider Trading

In the last 3 months there were 2,357,650 shares sold by insiders, including Robert I. Toll, Executive Chairman selling 938,183 shares on May 2, 2012 and 1,309,817 shares at the end of March.


  • PulteGroup, Inc. (NYSE:PHM) reported quarterly loss of ($0.03) per share on March 2012. On April 12, 2012, KeyBanc Capital Markets upgraded the company from Hold to Moderate Buy.
  • DR Horton Inc. (NYSE:DHI) reported quarterly EPS $0.13 vs. $0.04 estimated on March 2012.
  • Hovnanian Enterprises Inc. (NYSE:HOV) reported ($0.17) loss per share vs. ($0.47) loss per share estimated on January 2012.

Technical Insight

The stock is trading in an upward channel. It has recently hit its 52 week high at $27.80 and is now testing its 21 day moving average.

Sources: Yahoo Finance, Google Finance, CNBC, Marketwatch, Reuters, Forbes.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Tagged: , Residential Construction, Earnings
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