UPDATE: Credit Suisse Starts Toll Bros. (TOL) at Outperform

April 5, 2022 4:15 AM EDT
Get Alerts TOL Hot Sheet
Price: $44.60 --0%

Rating Summary:
    13 Buy, 18 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 3 | Down: 8 | New: 7
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(Updated - April 5, 2022 4:24 AM EDT)

Credit Suisse analyst Daniel Oppenheim initiates coverage on Toll Bros. (NYSE: TOL) with a Outperform rating and a price target of $63.00.

The analyst comments "The Leader in the Luxury Market and Broadening Its Reach: TOL has been the leading luxury builder for decades with a significantly higher average selling price than peers ($844,000 vs. $428,000). TOL is now using its established and recognized brand with homes that are more affordable luxury, generally with a price point of $400,000-650,000. We believe that this will enable TOL to reach a wider segment of the market, as homes selling for more than $750,000 represent just 21% of overall new home sales nationally and 12.5% of existing home sales. Margins and Profitability Should Increase Sharply over the Course of 2022: We expect TOL’s margins to increase by 300 basis points in 2022 relative to 2021, with gross margins reaching 25.5%, up from 22.5%. We estimate that TOL’s margin expansion will be highest among the builders and will lead to an 54% increase in EPS. TOL to Maintain ROE Above 20% in Coming Years: We believe that TOL will generate a ROE of 22% in 2022 and 2023 and that it can sustain its ROE above 20% in the coming years based on its efforts to reduce the capital intensity of the business and its profitable operations."

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 $48.61 yesterday.


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