Why Toll Brothers Stock Is Falling After Earnings
Toll Brothers stock is lower Wednesday after the homebuilder missed expectations for its first quarter. Here's what you need to know.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Toll Brothers (TOL) stock is lower Wednesday after the homebuilder came up short of top- and bottom-line expectations for its first quarter.
In the three months ending January 31, Toll Brothers' home sales revenue decreased 4.7% year over year to $1.84 billion. Earnings per share (EPS) declined 22.2% from the year-ago period to $1.75.
"While demand was solid in our first quarter, we have seen mixed results so far this spring selling season," said Toll Brothers CEO Douglas C. Yearley said.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Demand remains healthy "particularly at the higher end" of Toll Brothers' market, though Yearley added that "affordability constraints and growing inventories in certain markets are pressuring sales—especially at the lower end."
The CEO noted in his statement that EPS and net income were impacted by "impairments and a delay in the sale of a stabilized apartment property in one of our joint ventures."
The results missed analysts' expectations. Wall Street was anticipating revenue of $1.91 billion and earnings of $2.04 per share, according to CNBC.
Toll Brothers said that home deliveries came in at 1,991 in the quarter, which also fell short of expectations of 2,060 homes.
For its second quarter, Toll Brothers said it expects home deliveries of 2,500 to 2,700 units at an average delivered price per home of $940,000 to $960,000. It also maintained its full-year forecast of home deliveries of 11,200 to 11,600 units at an average price of $945,000 to $965,000.
"We believe the long-term outlook for the new home market remains very positive and continues to be supported by strong fundamentals," Yearley said.
Is TOL stock a buy, sell or hold?
Toll Brothers stock generated a total return of 23.5% in 2024, only slightly underperforming the S&P 500's 25% gain. And its stock buyback program remains on track. It's down for the year to date, but Wall Street is bullish on the homebuilder.
According to S&P Global Market Intelligence, the average analyst target price for TOL stock is $155.77, representing implied upside of nearly 35% to current levels. And the consensus recommendation is Buy.
Financial services firm Oppenheimer maintained its Outperform rating (equivalent to a Buy) and its $189 price target on TOL stock following the earnings release.
"The core homebuilding business performed mostly as we expected. Gross margin was a positive highlight, though orders missed our model by 124 homes (or 5%)," Oppenheimer analyst Tyler Batory said in a note.
The analyst explained that the earnings miss "was due to impairments and a delay of the sale of an apartment property" and highlighted the fact that "TOL reaffirmed all key homebuilding guidance metrics for the full year."
Related Content
-
Dow Adds 1,206 Points to Top 50,000: Stock Market TodayThe S&P 500 and Nasdaq also had strong finishes to a volatile week, with beaten-down tech stocks outperforming.
-
Ask the Tax Editor: Federal Income Tax DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on federal income tax deductions
-
States With No-Fault Car Insurance Laws (and How No-Fault Car Insurance Works)A breakdown of the confusing rules around no-fault car insurance in every state where it exists.
-
Dow Adds 1,206 Points to Top 50,000: Stock Market Today
The S&P 500 and Nasdaq also had strong finishes to a volatile week, with beaten-down tech stocks outperforming.
-
The Best Precious Metals ETFs to Buy in 2026Precious metals ETFs provide a hedge against monetary debasement and exposure to industrial-related tailwinds from emerging markets.
-
For the 2% Club, the Guardrails Approach and the 4% Rule Do Not Work: Here's What Works InsteadFor retirees with a pension, traditional withdrawal rules could be too restrictive. You need a tailored income plan that is much more flexible and realistic.
-
Retiring Next Year? Now Is the Time to Start Designing What Your Retirement Will Look LikeThis is when you should be shifting your focus from growing your portfolio to designing an income and tax strategy that aligns your resources with your purpose.
-
I'm a Financial Planner: This Layered Approach for Your Retirement Money Can Help Lower Your StressTo be confident about retirement, consider building a safety net by dividing assets into distinct layers and establishing a regular review process. Here's how.
-
Stocks Sink With Alphabet, Bitcoin: Stock Market TodayA dismal round of jobs data did little to lift sentiment on Thursday.
-
The 4 Estate Planning Documents Every High-Net-Worth Family Needs (Not Just a Will)The key to successful estate planning for HNW families isn't just drafting these four documents, but ensuring they're current and immediately accessible.
-
Love and Legacy: What Couples Rarely Talk About (But Should)Couples who talk openly about finances, including estate planning, are more likely to head into retirement joyfully. How can you get the conversation going?
