Stock market today: S&P 500 climbs as health care, tech gain; Nvidia earnings loom
On Friday, UBS analyst John Lovallo reaffirmed a Buy rating on Toll Brothers (NYSE:TOL) stock, with a steady price target of $183.00. According to InvestingPro data, this target represents significant upside potential from the current price of $103.20, with the stock currently trading at an attractive P/E ratio of 7.0x. The endorsement follows investor meetings in Boston with Toll Brothers’ executives Gregg Ziegler, Senior Vice President - Investor Relations & Treasurer, and Drew Petri, Assistant Director - Finance. Toll Brothers, a company specializing in luxury homes, is reportedly expanding its competitive edge as smaller private builders face challenges securing financing and competing for land and labor resources.
According to Toll Brothers, the company’s significant size and scale afford it a cost advantage of $50 to $100 per square foot compared to these smaller competitors. This cost benefit is seen as a key differentiator in the luxury home market. The company’s strong financial position is evident in its impressive current ratio of 4.41 and moderate debt levels, with InvestingPro assigning it a "GREAT" overall financial health score. Toll Brothers’ confidence in the durability of the luxury buyer market is bolstered by the fact that approximately 25% of their buyers pay in cash. Additionally, these customers typically have low loan-to-value ratios (LTVs) of 68% and a propensity to spend more on high-margin options and upgrades.
Toll Brothers’ strategic focus is increasingly on land acquisition tailored to the luxury segment, anticipating sustained demand from move-up and luxury buyers. The company’s assessment of its financial position and market strategy underscores its optimistic outlook for the luxury housing sector.
The UBS analyst’s reiteration of the Buy rating and price target reflects confidence in Toll Brothers’ market strategy and its ability to capitalize on the luxury home segment’s dynamics. Toll Brothers’ stock continues to be watched by investors following the company’s strategic moves to strengthen its position in the competitive landscape. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued, with multiple ProTips and comprehensive financial metrics available to subscribers, including detailed insights into the company’s growth trajectory and market position.
In other recent news, Toll Brothers announced a 9% increase in its quarterly cash dividend, marking the fifth consecutive year of dividend growth. The dividend of $0.25 per share is set for payment on April 25, 2025, to shareholders of record as of April 11, 2025. Additionally, shareholders approved a corporate governance amendment allowing for the removal of a director with a simple majority vote, enhancing board management flexibility. Keefe, Bruyette & Woods recently adjusted their price target for Toll Brothers to $132 from $164, while maintaining a Market Perform rating, following fiscal first-quarter results that were slightly below expectations. Citi also revised its price target to $123 from $137, citing a decrease in fiscal year 2025 earnings per share estimates due to impairments and softer demand. RBC Capital Markets reduced its price target to $139 from $142, maintaining an Outperform rating, and noted Toll Brothers’ strong gross margin percentage amidst mixed demand signals. The company’s second-quarter guidance anticipates improved gross margins driven by luxury deliveries, despite current market challenges. These developments reflect ongoing adjustments and strategic responses by Toll Brothers to the fluctuating real estate market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.