Growing Through Challenges? – Toll Brothers Inc. (TOL)


Capital Research & Management Co. recently announced the acquisition of new stake in Toll Brothers Inc. (NYSE:TOL). The institutional investor has increased its shareholding in the Consumer Cyclical company by 44.89% to 14.89 million shares with purchase of 4.61 million shares. This fresh investment now brings its stake to 11.85% valued currently at $485.34 million. In addition, Greenhaven Associates, Inc. raised its holdings by 1.25 million to 4.97 million shares. And Newton Investment Management Ltd. has lifted its position by 16.56% or 0.31 million shares – to 2.18 million shares.

With over 1.29 million Toll Brothers Inc. (TOL) shares trading Thursday and a closing price of $38.36 on the day, the dollar volume was approximately $49.56 million. The shares have shown a positive weekly performance of 4.81% and its price on 07/30/20 lost nearly -0.62%. Currently, there are 128.21M common shares owned by the public and among those 113.79M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 18 analysts who have offered their price forecasts for TOL have a consensus price objective of $36.32. The analysts have set the share’s price value over the next 12 months at a high of $50.00 and a low of $27.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Toll Brothers Inc. stock is 2.80 for the next 12 months. The average price target is -4.87% below its last price level and a downside to the estimated low will see the stock lose -42.07% over that period. But an upside of 23.28% will see the stock hit the forecast high price target while mean target price for the stock is $35.50.

Insiders at the company have transacted a total of 54 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 30 of these insider trades were purchases, accounting for 495,008 shares. Insider sales of the common stock occurred on 24 occasions, with total insider shares sold totaling 441,052 shares.

The top 3 mutual fund holders in Toll Brothers Inc. are American Balanced Fund, American Funds Insurance Series -, and Vanguard Total Stock Market Index. American Balanced Fund owns 6.97 million shares of the company’s stock, all valued at over $227.05 million. The company sold -1.27 million shares recently to bring their total holdings to about 5.55% of the shares outstanding. Vanguard Total Stock Market Index sold -0.41 million shares to bring its total holdings to over 3.26 million shares at a value of $106.11 million. Vanguard Total Stock Market Index now owns shares totaling to 2.59% of the shares outstanding.

Shares of Toll Brothers Inc. (NYSE: TOL) opened at $37.80, down -$0.8 from a prior closing price of $38.60. However, the script later closed the day at $38.36, down -0.62%. The company’s stock has a 5-day price change of 4.81% and 59.70% over the past three months. TOL shares are trading -2.91% year to date (YTD), with the 12-month market performance up to 6.64% higher. It has a 12-month low price of $13.28 and touched a high of $49.31 over the same period. Currently, 1.29 million shares have been traded, compared to an average intraday trading volume of 2.53 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 10.82%, 15.86%, and 10.17% respectively.

Institutional ownership of Toll Brothers Inc. (NYSE: TOL) shares accounts for 88.40% of the company’s 128.21M shares outstanding. Mutual fund holders own 34.41%, while other institutional holders and individual stakeholders account for 50.42% and 12.69% respectively.

It has a market capitalization of $4.74B and a beta (3y monthly) value of 1.69. The stock’s trailing 12-month PE ratio is 11.27, while the earnings-per-share (ttm) stands at $3.40. The company has a debt-to-equity ratio at 0.95. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.24% over the week and 4.70% over the month.

Analysts forecast that Toll Brothers Inc. (TOL) will achieve an EPS of $0.7 for the current quarter, $1.12 for the next quarter and $3.44 for 2021. The lowest estimate earnings-per-share for the quarter is $0.57 while analysts give the company a high EPS estimate of $0.99. Comparatively, EPS for the current quarter was $1 a year ago. Earnings per share for the fiscal year are expected to decrease by -12.90%, and 22.01% over the next financial year. EPS should shrink at an annualized rate of -1.88% over the next five years, compared to 17.00% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 18 brokerage firm advisors rate Toll Brothers Inc. (TOL) as a “Moderate Buy” at a consensus score of 2.80. Specifically, 5 Wall Street analysts polled rate the stock as a buy, while 7 of the 18 advise that investors “hold,” and 4 rated it as a “Sell.”

Looking at the support for the TOL, a number of firms have released research notes about the stock. BTIG Research stated their Sell rating for the stock in a research note on July 21, 2020, with the firm’s price target at $27. Keefe Bruyette coverage for the Toll Brothers Inc. (TOL) stock in a research note released on June 30, 2020 offered a Outperform rating with a price target of $40. Evercore ISI was of a view on June 05, 2020 that the stock is Outperform, while Credit Suisse gave the stock Neutral rating on May 28, 2020, issuing a price target of $31. Evercore ISI on their part issued In-line rating on May 04, 2020.


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