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Toll Brothers Inc. (TOL)

  • Jan. 17, 2014, 9:49 AM
    • December housing starts of 999K fell 9.8% from November, but are up 1.6% from a year ago. SIngle family starts of 667K fell 7% from last month. For the full year, an estimated 923.4K housing units were started, up 18.2% from 2012.
    • Building permits of 986K declined 3% M/M, rose 4.6% Y/Y. For the full year, an estimated 974K units were authorized, up 17.5% from 2012.
    • Full report
    • XHB -0.75%, ITB -0.8%.
    • Builders: Toll Bros. (TOL -1.1%), Lennar (LEN -1.6%), Hovnanian (HOV -1.1%), Ryland (RYL -1.6%), D.R. Horton (DHI -1.1%), Pulte (PHM -1.4%), KB Home (KBH -0.9%).
    | 1 Comment
  • Jan. 16, 2014, 3:32 AM
    • The number of foreclosure filings dropped to the lowest level since 2007 last year, declining 26% to 1.36M properties, RealtyTrac says. The figure is less than half of the peak of 2.9M properties in 2010.
    • States with the highest foreclosure rates in 2013 were Florida, Nevada, Illinois, Maryland and Ohio.
    • The number of foreclosure processes started plunged 33% to 747,728, the lowest since RealtyTrac began tracking the data in 2006. Bank repossessions plummeted 31% to 462,970 properties, the least since 2007. (PR)
    • Relevant tickers: PHM, MHO, TOL, KBH, RYL, HOV, SPF, FNMA, FMCC
    | 1 Comment
  • Dec. 23, 2013, 2:22 PM
    • Homebuilders and private mortgage insurers are partying thanks to incoming FHFA chief Mel Watts' weekend move to postpone an increase in fees which would have raised significantly raised mortgage costs for those with good, but not stellar credit and less than 20% to put down.
    • "This is a victory for the housing finance industry," says FBR's Edward Mills. "We believe that this is the first of a series of decisions by incoming Director Watt to preserve/expand mortgage credit availability ... We view this announcement as positive for housing generally, but specifically for private mortgage insurers, originators, and homebuilders."
    • Homebuilder ETFs: XHB +2%, ITB +2.8%.
    • Homebuilder names: Toll Brothers (TOL +3.9%), Putle (PHM +5%), Lennar (LEN +3.2%), KB Home (KBH +6.9%), Hovnanian (HOV +4.8%), D.R. Horton (DHI +2.8%), Standard Pacific (SPF +4%).
    • Mortgage insurers: Radian (RDN +4.1%), MGIC (MTG +1.1%), Genworth (GNW +1.6%), Old Republic (ORI +0.7%), NMI Holdings (NMIH +1.1%). Essent Group (ESNT -0.6%) is off a hair, but up 29% since its late-October IPO.
    • Not showing much reaction today, but potentially set up to disappoint if the GSEs do not allow any private oxygen in mortgage finance are Redwood Trust (RWT -0.2%) and PennyMac Financial (PFSI +1.2%).
  • Dec. 11, 2013, 2:59 PM
    • The two worst-performing sectors on a down day are industrials (XLI -1.4%) and homebuilders (XHB -1.5%), (ITB -1.9%).
    • Industrials are taking a hit after Joy Global (JOY -6.3%) missed earnings estimates and provided disappointing guidance. "With a limited number of projects that can book in time to help 2014, we continue to see both the need and opportunity to lower the cost base in our business," says the company. Caterpillar (CAT -1.2%).
    • Homebuilders continue to digest Toll Brothers' (TOL -1.8%"leveling in demand" comments from yesterday's earnings results - in the 19 weeks since August 1, business has been flat vs. last year, and in the first 5 weeks of FQ1 (beginning Nov. 1) business has also been flat from 2012 (though Hurricane Sandy makes a tricky comparison).
    • CEO Doug Yearley on the earnings call (transcript): "There's just not a lot of action [this time of year]. We still feel like pent-up demand is building, demographics are on our side, affordability is in place, and we are cautiously optimistic about the spring season, which begins the end of January."
    • Lennar (LEN -2.3%), D. R. Horton (DHI -3%), KB Home (KBH -3.1%), Hovnanian (HOV -3.3%)
    | 1 Comment
  • Dec. 10, 2013, 11:26 AM
    • Toll Brothers (TOL +0.1%) gives up a sizable post-earnings premarket pop with management's "leveling in demand" comment about the current (6-week-old) quarter offering a nice excuse to sell. Thus far in the quarter, contracts are flat from last year after rising 6% in FQ4 and 25% in FQ3.
    • Homebuilders ETFs: XHB +0.2%, ITB +0.3%.
    | Comment!
  • Dec. 10, 2013, 7:34 AM
    • Pre-tax income of $150.2M is up 147% from a year ago on revenue of $1.04B, up $65%. Deliveries of 1,485 units is up 36% Y/Y.
    • Net signed contracts of $839M and 1,163 units are up 23% and 6%, respectively, from a year ago. Backlog of $2.63B and 3,679 units up 57% and 43%, respectively.
    • Average price of homes delivered of $703K is up from $651K in Q3 and $582K a year ago. Operating margin of 12.3% is up 400 basis points from a year ago.
    • Six weeks into FQ1, the company updates: "Contracts have been flat to last year ... We believe this leveling in demand will prove temporary based on still-significant pent-up demand."
    • The Shapell Homes (California) acquisition is expected to close in early 2014.
    • CC at 2 ET.
    • FQ4 results, press release
    • TOL +3.6% premarket
    | Comment!
  • Dec. 10, 2013, 5:47 AM
    • Toll Brothers (TOL): FQ4 EPS of $0.54 beats by $0.10.
    • Revenue of $1.04B. (PR)
    | Comment!
  • Dec. 10, 2013, 12:05 AM
  • Dec. 9, 2013, 5:30 PM
  • Nov. 26, 2013, 9:34 AM
    • Homebuilders have their tails in the air following this morning's housing starts report which beat expectations and also included a big building permits print - up 6.2% from September and 13.9% from a year ago.
    • Full report
    • ETF: XHB +0.7%, ITB +0.7%.
    • Toll Bros. (TOL +1%), Pulte (PHM +1.1%), Hovnanian (HOV +1%), D.R. Horton (DHI +1.3%), Lennar (LEN -0.7%)
  • Nov. 25, 2013, 10:22 AM
    • The homebuilders (ITB -1.1%), (XHB -0.8%) are outliers to the downside as the NAR's October Pending Home Sales Index slips to its lowest since December 2012. At 102.1, the index is also 1.6% below its level of a year ago. A bright spot in the data is its age. October, shutdowns, and debt defaults were a long time ago.
    • The report has sent interest rates lower: At 2.77% just before the release, the 10-year yield is now 2.73%. TLT +0.4%, TBT -1%
    • Individual homebuilders: Toll Bros. (TOL -1.3%), NVR (NVR -0.9%), KB Home (KBH -2.8%), Lennar (LEN -1.7%), Pulte (PHM -1.9%)
    • Full report
    | 1 Comment
  • Nov. 8, 2013, 7:12 AM
    • Toll Brothers (TOL) has priced an offering of 6.25M shares at $32 each, which would enable the company to raise a gross $200M.
    • That sum could rise if underwriters take up a greenshoe option of 937,500 shares.
    • Toll expects the offering to close on Wednesday next week. The luxury home-builder plans to use the money to help pay for the $1.6B acquisition of the house-construction business of Shapell Industries.
    • Shares closed at $32.68 yesterday. (PR)
    | Comment!
  • Nov. 7, 2013, 7:06 AM
    • Toll Brothers (TOL) launches an offering of 6.25M shares as the luxury home-builder looks to raise money to help pay for the $1.6B acquisition of the house-construction business of Shapell Industries.
    • Should Toll sell the stock at yesterday's close of $32.52, it would raise just over $200M.
    • There is a greenshoe option of 937,500 shares.
    • Shares are +1.3% premarket. (PR)
    | 1 Comment
  • Nov. 7, 2013, 4:40 AM
    • Toll Brothers (TOL) has agreed to acquire the home-building business of privately owned Shapell Industries for $1.6B in a transaction that will boost the company's presence in California. Toll will pay for the purchase in debt and equity.
    • The luxury home-builder will gain Shapell's land portfolio of 5,200 home sites, most of which are entitled and which are located in many of California's most affluent and high-growth markets.
    • After the deal is closed, Toll plans to sell around $500M worth of land.
    • Toll believes that the acquisition will add to its earnings within the first year, excluding transaction costs.
    • News of the purchase comes just a few days after Tri Pointe Homes agreed to merge with Weyerhaeuser's home-building division in a $2.7B deal. (PR)
    • Meanwhile, Toll estimated that its FQ4 revenue rose a preliminary 65% to $1.04B, topping consensus of $921.03M, and lifted by price increases and an acceleration in the pace of sales.
    • The average price of homes delivered climbed to $703,000 from $582,000 a year earlier.
    • Contracts +23% in dollars and +6% in units.
    • 2013 backlog increased to 3,679 units and about $2.63B. (PR)
  • Oct. 24, 2013, 3:47 PM
    • With interest rates already sharply lower than during Q3, investors look past the slowdown in new home orders last quarter at PulteGroup (PHM +7.6%) . Also reporting today, M/I Homes (MHO +7.6%) records a similar gain after new contracts of 869 homes gained 15% from a year ago.
    • Not unnoticed is the average 30-year fixed mortgage rate falling 15 bps last week to a 4-month low of 4.13%.
    • Other builders: Toll Brothers (TOL +2.5%), KB Home (KBH +2.9%), Ryland RYL, Hovnanian (HOV +2.5%), Standard Pacific (SPF +2.5%).
    • ETFs: ITB +3.1%,  XHB +2.4%.
    | Comment!
  • Oct. 14, 2013, 11:35 AM
    • The average mortgage payment on a median-priced U.S. home as a share of income rose to 16% in August, according to the NAR. It's all about interest rates, as the rise occurred even as median prices slipped slightly this summer.
    • Still - by this measure - homes are still more affordable than at any time between 1989 and 2008.
    • The homebuilding sector is among the worst-performing today amid this news and word of rising incentives (lower profit margins) now necessary to move product.
    • ETFs: ITB -1.9%, XHB -1.6%.
    • TOL -2.1%, RYL -3.1%, HOV -1.4%, WLH -3.5%, PHM -2.9%.
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Company Description
Toll Brothers Inc designs, builds, markets and arranges financing for single-family detached and attached homes in luxury residential communities.