Toll Brothers Inc. (TOL), a prominent luxury homebuilder, will unveil its third-quarter financial results after market close on Tuesday. This report is anticipated to shed light on the current state of the housing market and the potential influence of the 2024 presidential election on the company’s performance.
Analysts are projecting Toll Brothers to report revenue of $2.71 billion for the third quarter, according to Benzinga Pro data. This would represent a slight increase from the $2.69 billion reported in the same period last year. The company has consistently surpassed revenue estimates in nine out of the past ten quarters, including a streak of seven consecutive quarters. Earnings per share are estimated at $3.31, compared to $3.73 in the third quarter of 2022. Toll Brothers has also exceeded earnings per share expectations in nine out of the last ten quarters, with the most recent exception being the second quarter. The company anticipates home deliveries to fall between 2,750 and 2,850 units in the third quarter.
The release of Toll Brothers’ earnings comes as analysts have recently lowered price targets for the company. Seaport Global downgraded its rating to Sell from Neutral with a price target of $108. Evercore ISI maintained its Outperform rating but raised the price target from $177 to $180. Barclays maintained its Underweight rating and lowered the price target from $118 to $116. Citigroup also maintained a Neutral rating but reduced the price target from $133 to $125.
Analysts and investors will be keenly observing Toll Brothers’ report, especially in light of recent reports from Home Depot and Lowe’s, which suggest consumers are prioritizing home repairs and staying put rather than pursuing new home purchases amid high prices. Toll Brothers’ commentary on new home construction and sales will be crucial in understanding this trend.
The report also arrives just a week after Vice President Kamala Harris, a presidential candidate, outlined a plan to address the housing shortage and make homeownership more accessible. Harris proposed a $25,000 credit for first-time homebuyers and a commitment to building three million new homes over four years. Toll Brothers’ perspective on this plan, including its potential benefits for homebuilders and the feasibility of achieving the three million goal, will be closely scrutinized by investors and analysts.
As Toll Brothers primarily focuses on the luxury segment, the impact of Harris’s plan, which prioritizes middle-class affordability, could differ for the company compared to its competitors. Investors will be looking for insights into whether the plan would primarily benefit those companies targeting the middle-income market.
Toll Brothers raised its full-year revenue and earnings guidance after reporting its second-quarter financial results. Any reaffirmation or further increase in guidance during the third-quarter earnings call would indicate a strong finish to the fiscal year.
Toll Brothers’ stock closed up 3.2% at $133.54 on Monday, within its 52-week trading range of $68.08 to $146.75. The stock has experienced a 29.4% year-to-date increase and a 66% rise over the past year.
