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Here's Why Toll Brothers (TOL) Fell More Than Broader Market

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The most recent trading session ended with Toll Brothers (TOL - Free Report) standing at $135.79, reflecting a -1.33% shift from the previouse trading day's closing. This change lagged the S&P 500's 0.47% loss on the day. Elsewhere, the Dow saw a downswing of 0.31%, while the tech-heavy Nasdaq depreciated by 0.51%.

Coming into today, shares of the home builder had gained 9.27% in the past month. In that same time, the Construction sector gained 0.6%, while the S&P 500 gained 1.67%.

The investment community will be paying close attention to the earnings performance of Toll Brothers in its upcoming release. The company's upcoming EPS is projected at $1.99, signifying a 11.56% drop compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $1.9 billion, indicating a 2.56% downward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.15 per share and revenue of $10.99 billion. These totals would mark changes of -5.73% and +1.29%, respectively, from last year.

Any recent changes to analyst estimates for Toll Brothers should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.7% fall in the Zacks Consensus EPS estimate. Toll Brothers currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Toll Brothers is holding a Forward P/E ratio of 9.73. This signifies a premium in comparison to the average Forward P/E of 8.34 for its industry.

We can also see that TOL currently has a PEG ratio of 1.19. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Building Products - Home Builders was holding an average PEG ratio of 0.98 at yesterday's closing price.

The Building Products - Home Builders industry is part of the Construction sector. With its current Zacks Industry Rank of 218, this industry ranks in the bottom 14% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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