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Toll Brothers , Inc. (NYSE:TOL), a leading construction company with a market capitalization of $12.47 billion and a "GREAT" financial health score according to InvestingPro, has announced the extension and increase of its credit facilities, signaling confidence in its financial position and future prospects. On February 7, 2025, the company and its subsidiary, First Huntingdon Finance Corp., extended the maturity date of their senior unsecured revolving credit agreement from February 14, 2028, to February 7, 2030.
Concurrently, the total available revolving loans and commitments under the agreement were increased from $1.955 billion to $2.35 billion. This expansion was executed through existing terms and a series of notices and acceptances with current and new lenders. The company maintains a strong financial position with a healthy current ratio of 5.03 and operates with a moderate debt-to-equity ratio of 0.39. No other terms of the Revolving Credit Agreement were altered in the process.
In a parallel move, Toll Brothers extended the maturity date of all outstanding loans under its $650 million senior unsecured term loan credit agreement from various existing maturity dates to February 7, 2030. This extension was also carried out according to the existing terms of the Term Loan Agreement, involving commitment, termination, and extension notices with the involved lenders. No further changes were made to the Term Loan Agreement.
The obligations under both the Revolving Credit Agreement and the Term Loan Agreement are guaranteed by Toll Brothers and its wholly owned home building subsidiaries. This strategic financial maneuvering is aimed at strengthening the company’s long-term financial flexibility and supporting its ongoing and future projects. According to InvestingPro’s analysis, which includes 12 additional key insights and a comprehensive Pro Research Report available to subscribers, the company appears undervalued based on its Fair Value assessment.
The information in this article is based on a recent SEC filing by Toll Brothers, Inc.
In other recent news, shares of prominent homebuilders, including LGI Homes (NASDAQ:LGIH), PulteGroup Inc (NYSE:PHM), Lennar (NYSE:LEN), Toll Brothers, DR Horton (NYSE:DHI), and Meritage (NYSE:MTH), experienced a sharp decline due to President Trump’s decision to impose a 25% tariff on Canadian lumber imports. This move is expected to increase costs for homebuilders and potentially lead to increased home prices. In response to these developments, Seaport Global Securities revised its stance on Toll Brothers and LGI Homes, upgrading both from Sell to Neutral. Analyst Kenneth Zener from Seaport Global Securities highlighted potential factors that could mitigate these concerns, including a 20% sector sell-off and the potential for a favorable valuation "re-rating" due to lower leverage and higher return on equity post-Covid.
Meanwhile, Toll Brothers and other homebuilding stocks saw an increase in their shares as wildfires continue to devastate Los Angeles. This uptick suggests an expectation for increased demand in the homebuilding sector due to the need for reconstruction in the affected areas. Amid these circumstances, Raymond (NSE:RYMD) James adjusted the price target for Toll Brothers from $170.00 to $165.00, while maintaining a Strong Buy rating. The firm noted Toll Brothers’ robust year-over-year new order growth of over 30%, viewing this as an indication of persistent demand and effective strategy execution. These are the recent developments in the homebuilding sector.
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