Toll Brothers, Inc. (TOL) Could Go Up In Smoke?

Analysts at RBC Capital Mkts cut their rating on shares of Toll Brothers, Inc. (NYSE:TOL) from Outperform to Sector Perform in their opinion released on December 06. Deutsche Bank analysts have downgraded their rating of TOL stock from Buy to Hold in a separate flash note to investors on October 22. Analysts at BofA/Merrill downgraded the stock to a Neutral call from its previous Buy stance, in a research note that dated back to October 18.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Toll Brothers, Inc. (NYSE:TOL)’s prospects. The earliest insider trade took place on 10/26/2018. Garvey Christine gathered a total of 0.01 thousand shares of company at average share price of $29.87. The total for the purchase was set at $0.27 thousand. After this transaction, the Director account balance stood at 2.72 thousand shares. The stock grew 11.15 percent since that insider purchase. On 08/23/2018, Braemer Richard J, Director, sold 15 thousand shares at a price per share of $38.12. This removed 571.8 thousand shares from the insider’s fortune and the stock saw a -12.91 percent retreat in value since the news became public. This transaction left 84.6 thousand shares in the Director account. On 08/23/2018, Director Boehne Edward G performed a sale transaction worth $639.88 thousand. This sale at $37.64 each has eliminated 17 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -11.8 percent decrease since the transaction was reported. The insider now is left with 45.2 thousand shares remaining in the account. Connor Martin P., who performs the CFO job, sold 12 thousand shares for $621.96 thousand. The disposal occurred on 01/22/2018 was priced at $51.83 per share. The share price plunged -35.94 percent since the reporting date. Connor Martin P. now left with a stake of 46.91 thousand TOL stock worth $1.56 million after the insider selling.

Toll Brothers, Inc. (TOL) is expected to jump by 23.92 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $48-month high price target. This represents a whopping 44.58 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $38, which represents a return potential of 14.46 percent when compared to the closing price of the stock of $33.2 on Thursday, December 06. The lowest price target for the stock is $29 — slightly more than -12.65 percent from TOL’s current share price.

The shares are currently floating around the first support level of $32.26. Below this, the next support is placed in the zone of $31.33. Till the time, the TOL stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 53.94 on daily chart, which may remain a cause for concern. If the price breaks below $31.33 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $33.97 mark may result into a pull-back move towards $34.75 level.

TOL shares accumulated 0.21 points or 0.64 percent on Thursday to $33.2 with a heavy trade volume of 4.767 million shares. After opening the session at $32.5, the shares went as high as $33.81 and as low as $32.1, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $4.99 billion and now has 150.22 million shares outstanding. Toll Brothers, Inc. (TOL) stock has lost -0.95 percent of market value in 21 trading days.

TOL stock has a trailing 3-year beta of 1.16, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $3.75 a share in the trailing twelve months. The stock’s value has fallen -30.86 percent year to date (YTD) against a decline of -29.26 percent in 12 month’s time. The company’s shares still trade -37.04 percent away from its 1-year high of $52.73 and 15.76 percent up from 52-week low of $28.68. The average consensus rating on the company is 2.6, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Toll Brothers, Inc. (TOL) are trading at a P/E ratio of 8.82 times earnings reported for the past 12 months. The industry TOL operates in has an average P/E of 10.22. Its P/E ratio went as low as 12.59X and as high as 33.98 over the 5-year span. Further, it is sporting a 0.74 on the Price-to-Sales ratio. Compare this with the industry average P/S of 0.77. 20.8 percent is the gross profit margin for Toll Brothers, Inc. and operating margin sits at 10.9 percent. Along with this, the net profit margin is 9.4 percent.

TOL will be showing off its Q1 earnings on February 28. Analysts are forecasting revenue to climb 10.7 percent to $1.3B in the next fiscal quarter, while earnings are seen soaring by nearly -21.69 percent to $0.65 per share. History has shown that shares in Toll Brothers, Inc. have gone up on 19 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. In last reported earnings results, it earned $2.08 per share, better than the $1.83, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.91B, better than the $1.81B analysts expected. Earnings are estimated to increase by 45.3 percent this year, 9.8 percent next year and continue to increase by 14.35 percent annually for the next 5 years.