Toll Brothers, Inc. (TOL) Insider Trading Is Uncovering Many Things

If you can handle volatility, Toll Brothers, Inc. (NYSE:TOL) is the stock to watch now. The stock closed lower on 11 February. The shares dropped -0.4 points or -1.1 percent at $35.95 with a light trade volume of 1.564 million shares. After opening the session at $36.44, the shares went as high as $36.44 and as low as $35.86, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $5.29 billion and now has 147.07 million shares outstanding. Toll Brothers, Inc. (TOL) stock has lost -0.53 percent of market value in 21 trading days.

TOL stock has a trailing 3-year beta of 1.01, 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 $4.67 a share in the trailing twelve months. The stock’s value has surged 9.17 percent year to date (YTD) against a decline of -17.83 percent in 12 month’s time. The company’s shares still trade -26.99 percent away from its 1-year high of $49.24 and 25.35 percent up from 52-week low of $28.68. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Toll Brothers, Inc. (TOL) will probably climb 5.9 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $48 price as 12-month high target. This represents a whopping 33.52 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $37.5, which represents a return potential of 4.31 percent when compared to the closing price of the stock of $35.95 on Monday, February 11. The lowest price target for the stock is $32 — slightly more than -10.99 percent from TOL’s current share price.

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. Investors will get their next glimpse of TOL’s Q1 earnings on February 28. Analysts are forecasting revenue to climb 7.5 percent to $1.26B in the fiscal first quarter, while earnings are seen soaring by nearly -25.3 percent to $0.62 per share. It earned $2.08 per share, better than the $1.83, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.46B, better than the $2.35B analysts expected. Earnings are estimated to increase by 45.9 percent this year, 1.83 percent next year and continue to increase by 1.05 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $35.73. Below this, the next support is placed in the zone of $35.5. Till the time, the TOL stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 54.35 on daily chart, which may remain a cause for concern. If the price breaks below $35.5 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $36.31 mark may result into a pull-back move towards $36.66 level.

Shares of Toll Brothers, Inc. (TOL) are trading at a P/E ratio of 7.79 times earnings reported for the past 12 months. The industry TOL operates in has an average P/E of 10.17. Its P/E ratio went as low as 7.28X and as high as 18.22 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 0.73. 20.6 percent is the gross profit margin for Toll Brothers, Inc. and operating margin sits at 11 percent. Along with this, the net profit margin is 10.5 percent.