The report on Toll Brothers is updated and rated Weak Buy / Hold at $104. This stock has surged from about $68 just two months ago. Its contracts to build new homes have surged recently and so the stock price could very well continue to rise. Home Builders have been doing well despite higher interest rates because there has been a lack of existing homes for sale as homeowners with low mortgage rates locked in long term are reluctant to sell. And in recent weeks lower interest rates have been beneficial. Its profit margins on each house have also recently surged.
This is a strong company but it tends to be volatile and so I am cautious on it now after the recent price surge. Its reported earnings are likely to decline year over year in the next two quarters due to lower contracts last year. It’s not clear if that will impact the price since the market may pay more attention to the higher signed contracts that will show up in higher profits by the last half of its fiscal 2024 ending October 31, 2024.