Toro price target lowered to $76 from $80 at DA Davidson

Investing.com - DA Davidson has lowered its price target on Toro (NYSE:TTC) to $76.00 from $80.00 while maintaining a Neutral rating on the stock. The company, currently valued at $7.2 billion, trades at a P/E ratio of 18.8x and according to InvestingPro analysis appears undervalued relative to its Fair Value.

The price target adjustment follows Toro’s fiscal second-quarter 2025 earnings report, in which the company exceeded earnings per share expectations and reported $200 million in share buybacks year-to-date. These buybacks reflect management’s continued commitment to shareholder returns, complementing the company’s impressive 21-year streak of dividend increases.

DA Davidson noted that Toro’s professional-focused segments, including golf, construction, and snow equipment, are experiencing healthy demand according to their analysis.

The firm cited consumer caution and tariff impacts as factors giving Toro’s management pause, though analysts believe end-users will eventually return to the market.

DA Davidson indicated it would need to see early signs of a return to double-digit annualized earnings growth, either organic or inorganic, before reconsidering its current Neutral stance on Toro stock.

In other recent news, Toro Company reported its second-quarter earnings for fiscal year 2025, surpassing expectations with an adjusted earnings per share (EPS) of $1.42, compared to the forecasted $1.38. However, the company faced a slight revenue shortfall, with consolidated net sales of $1.32 billion, falling short of the anticipated $1.35 billion. Despite the positive EPS results, Toro’s stock experienced a downgrade from Northland analysts, who reduced the rating from Outperform to Market Perform due to mixed quarterly results and a reduction in full-year guidance. Northland also lowered the price target for Toro from $100 to $80, citing weakening residential demand and tariff impacts as contributing factors.

DA Davidson also adjusted its outlook, cutting the price target for Toro to $76 from $80, while maintaining a Neutral rating. This revision followed Toro’s announcement of a $200 million share repurchase, reflecting confidence in its financial stability. Toro’s professional segments, including golf and construction, showed growth, but the residential segment saw an 11% decline in sales, influenced by weak consumer confidence and tariffs.

The company has implemented significant operational cost-saving measures and remains optimistic about its professional segments, driven by infrastructure and data center projects. Analysts noted that while residential demand remains a concern, there is little downside risk to Toro’s shares at current levels. Toro’s management continues to focus on operational excellence and strategic initiatives to navigate the current market challenges.

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