Yahoo Finance Toll Brothers, Inc. Just Recorded An Earnings Miss And Analysts Are Updating Their Numbers
Toll Brothers, Inc. (NYSE:TOL) missed earnings with its latest quarterly 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. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
See our latest analysis for Toll Brothers
Taking into account the latest results, Toll Brothers's 13 analysts currently expect revenues in 2020 to be US$7.29b, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 2.1% to US$3.66 in the same period. Before this earnings report, analysts had been forecasting revenues of US$7.29b and earnings per share (EPS) of US$3.66 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$42.54. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Toll Brothers at US$54.00 per share, while the most bearish prices it at US$36.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Toll Brothers shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Toll Brothers's revenue growth is expected to slow, with forecast 1.4% increase next year well below the historical 14%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Toll Brothers.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Toll Brothers's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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.
It might also be worth considering whether Toll Brothers's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
