Goldman Sachs Raises Price Target on Toll Bros. (TOL) On Market Share Strength

February 23, 2012 8:01 AM EST
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Price: $30.90 --0%

Rating Summary:
    13 Buy, 15 Hold, 0 Sell

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    Up: 10 | Down: 16 | New: 50
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Goldman Sachs raised its price target on Buy-rated Toll Bros. (NYSE: TOL) from $24 to $26 following Q1 EPS that missed the Street, but a strengthening market position.

The firm said while the lumpiness in the high rise business is leading to volatile
backlog burn, the company's exposure to New York City via its own communities/high-rises as well as the resultant higher risk adjusted margins, is positive.

Goldman also said the company's market share gains in the quarter are likely to be the "stickiest" among builders. Also, Gross margin progression has been encouraging and stable/positive pricing is reassuring, the firm notes.

"Supported by stable/positive pricing trends, better credit availability and a more optimistic housing outlook, we expect the relative strength in high end housing to continue," the analyst said.

The firm adjusted 2012-2014E EPS to reflect our improved delivery estimates. FY12 goes form $0.45 to $.44, FY13 from $0.78 to $0.79 and FY14 from $1.12 to $1.15.

For an analyst ratings summary and ratings history on Toll Bros. click here. For more ratings news on Toll Bros. click here.

Shares of Toll Bros. closed at $22.48 yesterday.

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