RBC upgrades this homebuilder, says shares could jump nearly 20%
Luxury homebuilder Toll Brothers is in for strong gains, according to RBC Capital Markets. The firm believes overly negative sentiment around Toll Brothers’ shares will soon dissipate, largely due to the company’s high-end, West Coast, and build-to-order offerings. Recent trends have shown that Toll Brothers’ improvements have been in line with those experienced by its peers. RBC Capital Markets analyst Mike Dahl upgraded the shares from sector perform to outperform, while upping his price target from $55 to $77, an 18% upside from Wednesday’s close. Dahl expects outsized order growth for Toll Brothers through the first fiscal quarter of 2024, thanks to easy comps. Toll Brothers announced its fiscal Q2 earnings on Tuesday, topping analysts’ estimates. In addition, management said the increase in demand that began in January has continued into the third fiscal quarter.
FAQs:
Who is RBC Capital Markets?
RBC Capital Markets is the investment banking and capital markets arm of the Royal Bank of Canada.
What is Toll Brothers?
Toll Brothers is a luxury homebuilder founded in 1967, with inroads to the West Coast and build-to-order services.
Why does RBC Capital Markets believe Toll Brothers is due for strong gains?
The firm believes Toll Brothers’ recent improvements have been in line with those of its peers. Toll Brothers is a relative outperformer thanks to its resilient margins profile and inexpensive valuation.
What is Toll Brothers’ fiscal Q2 earnings report?
Toll Brothers’ fiscal Q2 earnings report shows that the company has topped analysts’ estimates and that the pick-up in demand that began in January has continued into the third fiscal quarter.
Homebuilder receives upgrade from RBC and potentially sees a nearly 20% increase in shares.
Toll Brothers, a luxury homebuilder, is expected to see strong gains as demand improves according to RBC Capital Markets. Analyst Mike Dahl upgraded the company’s shares from sector perform to outperform and raised his price target from $55 to $77, implying more than 18% upside from Wednesday’s close. Dahl believes that Toll Brothers has experienced improvement similar to its peers due to its high-end, West Coast, and build-to-order exposures. The company announced its fiscal second-quarter earnings on Tuesday, beating analysts’ estimates and confirming a rise in demand that has continued into its third fiscal quarter. Dahl remains concerned about the company’s recent improvements, but believes Toll Brothers to be a relative outperformer due to its resilient margins profile and an inexpensive valuation. Shares were up almost 1% on Thursday, with the stock surging more than 30% in 2023.