Toro stock price target cut to $76 by DA Davidson

On Monday, DA Davidson announced a revision of the price target for Toro (NYSE:TTC), reducing it from $80.00 to $76.00, while the firm maintained a Neutral rating on the stock. The adjustment follows Toro’s financial results for the second quarter of fiscal year 2025, where the company surpassed earnings per share (EPS) expectations and reported a significant share repurchase, buying back $200 million of its shares year-to-date. According to InvestingPro data, Toro currently trades at a P/E ratio of 17.6x and has seen its stock decline by 27.34% over the past year, suggesting potential value opportunity for investors seeking exposure to the industrial equipment sector.

Toro, known for its equipment and services for outdoor environments, including turf maintenance, snow and ice management, landscape, rental and specialty construction, and irrigation and outdoor lighting solutions, has demonstrated robust demand in its professional segments. These segments, which include golf, construction, and snow management, continue to perform well. With annual revenue of $4.5 billion and a market capitalization of $6.8 billion, InvestingPro analysis shows the company maintains a FAIR overall financial health score, operating with moderate debt levels and strong liquidity ratios.

Despite the positive performance in these professional areas, DA Davidson pointed out that consumer caution and the effects of tariffs are causing some concern for Toro’s management. However, the analyst believes that end-users will eventually return, indicating a potential rebound in consumer engagement with Toro’s products. InvestingPro Tips highlight that Toro has maintained dividend payments for 42 consecutive years and currently offers a 2.22% dividend yield, demonstrating its commitment to shareholder returns even during challenging periods.

The report from DA Davidson suggests that the firm is taking a cautious approach, looking for indications of Toro’s return to double-digit annualized earnings growth, whether through organic means or acquisitions, before changing its stance on the stock. For deeper insights into Toro’s growth potential and comprehensive financial analysis, investors can access the detailed Pro Research Report available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

Toro’s recent share repurchase activity reflects the company’s confidence in its financial stability and commitment to delivering value to its shareholders. The buyback represents a substantial investment back into the company and signals Toro’s optimistic outlook on its future performance.

As the market processes this update from DA Davidson, investors will be watching Toro’s progress closely, particularly for signs of the anticipated return to stronger earnings growth that could influence future assessments of the stock’s value.

In other recent news, Toro Company reported its second-quarter earnings for fiscal year 2025, revealing an adjusted earnings per share (EPS) of $1.42, which exceeded the forecast of $1.38. Despite this earnings beat, the company’s revenue came in at $1.32 billion, slightly below the expected $1.35 billion. This mixed performance led to Northland analysts downgrading Toro’s stock from Outperform to Market Perform, citing weakening residential demand and tariffs as factors for reducing the full-year guidance. The analysts also adjusted the price target for Toro stock to $80 from a previous target of $100.

Toro’s Professional segment showed resilience with a 1% increase in net sales, while the Residential segment experienced an 11% decline. In response to these challenges, the company announced significant operational cost-saving measures. Looking ahead, Toro anticipates flat to a 3% decline in revenue for the full year, with the Professional segment expected to see slight growth and the Residential segment facing a mid-teens decline. The company’s adjusted EPS guidance for the full year is set between $4.15 and $4.30.

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