Toll Brothers' (TOL) faces "elevated incentive activity and choppy industry demand trends," spurring a cut in estimated fiscal 2025 earnings, Oppenheimer said Monday in a report.
The EPS projection was cut to $14.17 from $14.53 by Oppenheimer with the Wall Street forecast at $14.57.
Toll Brothers may issue a "conservative outlook on FY25 when it reports next month, given more spec sales lower its visibility into future earnings," Oppenheimer said.
Still, the company's gross margin probably will be in line with management's long-term target of 27% to 28%, Oppenheimer said.
Toll Brothers "likely has the highest gross margin in the sector the next two quarters," the report said. "Its high-end core customer and unique product offerings are competitive advantages as well."
The company is still a top pick and the "best positioned builder" for 2025, Oppenheimer said.
The firm reiterated its outperform rating on Toll Brothers with a price target of $189 on the stock.
Shares of Toll Brothers eased 0.2% in recent Monday trading.
Price: 152.30, Change: -0.37, Percent Change: -0.24
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