Morgan Stanley Initiates Coverage on Toll Brothers (NYSE:TOL)

Key Points

• Morgan Stanley initiated coverage of Toll Brothers with an “overweight” rating and a $159 price target, implying 17.9% upside from the reported $134.86 share price.
• Analyst sentiment is broadly positive: 14 analysts rate the stock a Buy, four a Hold and one a Sell, resulting in a consensus “Moderate Buy” rating and an average price target of $166.40.
• Toll Brothers beat quarterly expectations with $2.97 in EPS versus $2.93 forecast and $2.66 billion in revenue, though revenue declined 9.7% year over year; institutional investors own 91.76% of the stock.

Research analysts at Morgan Stanley assumed coverage on shares of Toll Brothers (NYSE:TOL - Get Free Report) in a report issued on Thursday, Benzinga reports. The brokerage set an "overweight" rating and a $159.00 price target on the construction company's stock. Morgan Stanley's target price indicates a potential upside of 17.90% from the company's current price.

A number of other research firms also recently commented on TOL. Weiss Ratings raised Toll Brothers from a "hold (c+)" rating to a "buy (b-)" rating in a report on Tuesday. Piper Sandler downgraded Toll Brothers from an "overweight" rating to a "neutral" rating in a report on Tuesday, June 9th. Evercore set a $184.00 price objective on Toll Brothers in a research note on Friday, September 25th. Keefe, Bruyette & Woods lifted their price objective on shares of Toll Brothers from $161.00 to $170.00 and gave the stock an "outperform" rating in a report on Friday, August 28th. Finally, Royal Bank Of Canada reiterated an "outperform" rating and set a $158.00 target price on shares of Toll Brothers in a research note on Thursday, June 11th. Fourteen analysts have rated the stock with a Buy rating, four have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $166.40.

Toll Brothers Stock Down 0.7%

Shares of NYSE TOL opened at $134.86 on Thursday. Toll Brothers has a 1 year low of $123.14 and a 1 year high of $168.36. The firm has a market cap of $12.43 billion, a price-to-earnings ratio of 10.82, a PEG ratio of 1.10 and a beta of 1.34. The company has a debt-to-equity ratio of 0.32, a quick ratio of 0.55 and a current ratio of 4.53. The stock's 50-day simple moving average is $143.49 and its 200-day simple moving average is $143.22.

Toll Brothers (NYSE:TOL - Get Free Report) last posted its quarterly earnings data on Tuesday, August 18th. The construction company reported $2.97 EPS for the quarter, beating analysts' consensus estimates of $2.93 by $0.04. The firm had revenue of $2.66 billion for the quarter, compared to the consensus estimate of $2.62 billion. Toll Brothers had a net margin of 11.14% and a return on equity of 14.21%. The firm's revenue was down 9.7% compared to the same quarter last year. During the same period in the prior year, the firm posted $3.73 EPS. As a group, equities analysts anticipate that Toll Brothers will post 12.81 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other Toll Brothers news, Director Stephen East sold 800 shares of the firm's stock in a transaction on Thursday, September 24th. The stock was sold at an average price of $135.99, for a total value of $108,792.00. Following the sale, the director directly owned 12,642 shares in the company, valued at approximately $1,719,185.58. This trade represents a 5.95% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. 1.37% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Toll Brothers

Institutional investors have recently modified their holdings of the company. BlackRock Inc. acquired a new position in Toll Brothers during the 2nd quarter worth $1,610,696,000. Norges Bank acquired a new position in Toll Brothers in the fourth quarter worth approximately $168,312,000. Bamco Inc. NY acquired a new position in Toll Brothers in the second quarter worth approximately $166,250,000. Bank of New York Mellon Corp bought a new position in shares of Toll Brothers in the second quarter valued at $164,804,000. Finally, Bank of America Corp DE acquired a new stake in shares of Toll Brothers during the 2nd quarter valued at $125,912,000. Institutional investors own 91.76% of the company's stock.

Toll Brothers Company Profile

Toll Brothers, Inc is a U.S. luxury homebuilder that designs, constructs, markets and sells single-family homes, townhomes and condominiums. The company serves move-up, luxury, active-adult and urban buyers, offering homes in a range of architectural styles and price points.

Founded in 1967 by brothers Robert I. Toll and Bruce E. Toll, the company develops residential communities on land it acquires and prepares for construction. Its operations also include related services such as mortgage financing, title and settlement services, and property development through its Toll Brothers Apartment Living and Toll Brothers City Living businesses.

Toll Brothers operates across numerous metropolitan and suburban markets in the United States, with a presence in regions including the Northeast, Mid-Atlantic, Southeast, Texas, the Midwest, Arizona and the West Coast.

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