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Toll Brothers Builds A Foundation, As Market Cycles Point Higher

|About: Toll Brothers, Inc. (TOL), Includes: XHB

Toll Brothers (TOL) traded 12% higher on Tuesday morning, after posting earnings that beat analyst estimates.

The luxury home builder reported earnings per share of $1.26 and total revenue of $1.9 billion, compared to Wall Street expectations of $1.03 and $1.8 billion. As for its fiscal year guidance, the company increased its forecast to 8100-8400 units from 8000-8500, and increased its price forecast to $835,000-860,000 from $830,000-860,000.

“Existing home values have increased, providing move-up and empty-nester customers with more equity that they can put toward a new home purchase. We believe these two groups, along with the growing number of millennials starting to buy homes, are sources of new demand in the coming years,” explained CEO Douglas Yearley.

The home builder group was up as well, with the S&P Homebuilders ETF (XHB) rising 2%.

In analyzing the market cycles for TOL, we can see that the stock has begun the rising phase of the new market cycle. It has been weak for a while, as the negative outlook for interest rates has made investors cautious. Our near-term target is $41, as this may be an important bottom.

Toll Brothers (TOL) Stock Chart with Weekly Bars

For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.