Yahoo Finance Earnings Miss: Here's What Toll Brothers, Inc. Analysts Are Forecasting For Next Year
Toll Brothers, Inc. (NYSE:TOL) missed earnings with its latest first-quarter results, disappointing overly-optimistic analysts. Results look to have been somewhat negative - revenue fell 8.0% short of analyst estimates at US$1.3b, and statutory earnings of US$0.41 per share missed forecasts by 9.6%. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Toll Brothers
Following last week's earnings report, Toll Brothers's twelve analysts are forecasting 2020 revenues to be US$7.28b, approximately in line with the last 12 months. Statutory per share are forecast to be US$3.69, approximately in line with the last 12 months. In the lead-up to this report, analysts had been modelling revenues of US$7.31b and earnings per share (EPS) of US$3.93 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share forecasts for next year.
The consensus price target held steady at US$43.32, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Toll Brothers analyst has a price target of US$54.00 per share, while the most pessimistic values it at US$37.00. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Toll Brothers's performance in recent years. It's pretty clear that analysts expect Toll Brothers's revenue growth will slow down substantially, with revenues next year expected to grow 1.3%, compared to a historical growth rate of 14% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Toll Brothers to grow slower than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Toll Brothers. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$43.32, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Toll Brothers going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Toll Brothers's balance sheet, and whether we think Toll Brothers is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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