Stock of Toll Brothers (TOL) closed higher before the announcement of its quarter two results for financial year 2016.
Toll Brothers shares surged ahead 3.03% and closed at $27.57 on Friday before the announcement of company’s second quarterly results for this financial year.
Horsham, PA based company of luxury home builder are expected of earnings $1.04 billion in revenue and earnings per share of 46 cents by Wall Street. Revenue during the same quarter last year was $852.6 million and earnings per diluted share were 37 cents.
Stock market indicators MKM partners have maintained its “Buy” rating and target of $38 before announcement of company’s second quarterly results for the financial year 2016.
Experts strongly believe that focus area of the Toll Brother’s will be New York City market for the coming months. It is being observed that NYC market has slowed, and being discussed by TOL several times during past several quarters. The slowdown in NYC market has led down TOL’s share price significantly to 19% year-to-date vs. The S&P 500 is up 1%, whereas builder average down 10%.
Focus area of the company’s quarterly results will be comments and clarification regarding its pricing actions, concessions made and impact of living margin. City’s living margins are well above company’s average though. The separate team of Wall Street experts have given “Hold” status to TOL’s stock and score of C.
Company’s attractive valuation levels, good cash flow from operating activities. Company has reasonable debt level and enjoys strong financially sound position. All these factors also have helped TOL’s rating to improve.
There is also opinion by few market experts about weaknesses of the company and its disappointments on the ground of average stock performance, also concerns of net income. Though ratings may differ from experts to experts but The Street ratings have objectively rated stock of TOL as per “Risk-Adjusted total return over 12 months forecast.
It seems that few other factors like improved job scenario in the U.S. job market, assuring economy, home price surge, affordable interest/mortgage rates has helped TOLL brothers to clock higher sales. Homes sold during last quarter were priced from $720000 to $740000.
Infect, lower gross margin in second quarter of this fiscal can dampen the net income as well as fewer home deliveries in City Living Homes.
The nation’s luxury home builder stated that it has finalized new $1.125 billion credit facility for five years. Participants bank number increased to 18 from current 15. It comes with accordion feature where company can increase its credit facility up to $2 billion though subject to certain conditions.
Toll Brothers chief executive officer Douglas C. Yearley, jr., replied to correspondent, “Extension of credit facility of banks to our company shows our financial stability and attractive terms of transaction states our strength. We appreciate these outstanding working facilities with financial institutions, where housing market is going steady and recovering well.”
Toll Brothers ranked #16 among all 1500 in Fortune magazine’s survey of most admired and quality of products or services, it offered.
Toll Brother’s is one of the fortune 1000 companies which started operations in 1967 and went public in the year of 1986. Expected results of Toll Brother’s bring cheers to other companies as well in coming days.