Key Stats for Toll Brothers Stock
- Today’s Price Change: 5%
- Current Share Price: $111
- 52-Week High: $169
- TOL Stock Price Target: $139
What Happened?
Toll Brothers (TOL) stock jumped over 5.1% after the luxury homebuilder exceeded Wall Street’s quarterly earnings expectations.
The company reported adjusted earnings of $3.50 per share for its fiscal second quarter ended April 30, beating analyst estimates of $2.86. Revenue grew 47% sequentially to $2.74 billion versus the $2.49 billion consensus forecast.
Despite a challenging housing market, Toll Brothers delivered 2,899 homes during the quarter, representing a 10% increase from the previous year. The company maintained robust profit margins, with a home sales gross margin of 26% and an adjusted gross margin of 27.5%.
CEO Douglas Yearley expressed confidence in the long-term outlook. The executive explained that given the housing shortage and favorable demographics, Toll Brothers believes the outlook for the new home market remains positive, particularly for its luxury niche.
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What the Market Is Telling Us
The positive reaction to TOL stock reflects investor relief that the luxury segment of the housing market remains resilient despite broader industry challenges.
According to Redfin data, U.S. pending home sales fell 3.5% in April, and consumer sentiment dipped due to uncertainty surrounding President Trump’s tariff policies. However, Toll Brothers’ ability to exceed delivery expectations suggests continued demand for high-end homes.
Alternatively, some softening in new demand was evident, with net signed contracts declining 11% to $2.60 billion and contracted homes down 13%. The company’s backlog value decreased 7% to $6.84 billion, indicating potential headwinds ahead.
Nevertheless, Toll Brothers stock is supported by the company’s commitment to shareholder returns, including a 9% dividend increase and substantial stock repurchases at an average price of $107.84 per share.
Toll Brothers’ decision to reaffirm its full-year guidance, projecting deliveries of 11,200 to 11,600 units at an average sales price of $945,000 to $965,000, suggests management’s confidence in navigating the current market environment.
Toll Brothers’ continued investment in future growth, spending $723 million to acquire 4,380 lots, indicates a strategic focus on long-term expansion.
As housing inventory remains tight across the country, TOL stock appears well-positioned to benefit from its focus on the luxury segment, where buyer demand has proven more resilient to interest rate fluctuations.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
