September 5, 2014 Comments

Toll Brothers is updated and is rated Buy at $33.78. It’s P/E is still high at about 23 and the ROE is too low at 7.9%. But it is set to continue to increase earnings strongly in the next six to nine months. However with new contracts to sell houses having declined slightly, its earnings may flatten after that. The company believes that the housing recovery continues although it is bumpy. Toll Brothers is a luxury home builder with an average selling price just over $700,000. More recently it has gotten into building expensive condos in New York and other cities. A joint venture in New York is selling condos that in recent quarters averaged $3 to $5 million per unit.