Toll Brothers updated December 26, 2021

Toll Brothers is updated and rated Strong Buy at 70.48. I was going to be conservative and rate is a bit lower at (higher) Buy given its volatile history. But it’s trading a t 10 times earnings and the company forecasts a 50% gain in earnings in the year that started November 1 and expects the strong housing market to continue for the foreseeable future.  Its latest ROE is 17% and management expects that to rise over 20%. They are buying back shares. The price to book value ratio seems reasonable at 1.65 . Basically, if this is not a Strong Buy, then what would be? At the same time, be aware it has a volatile history. The housing market could cool. Certainly Omicron might cause a stall. And the price tends to drop quickly at any sign of trouble. 

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