Toll Brothers Shares Dip On Q2 Results Despite Earnings Beat

Toll Brothers, Inc TOL shares experienced a decline Wednesday following the release of the company’s second-quarter 2024 financial results, despite reporting earnings that exceeded analyst expectations. 

What To Know: The luxury homebuilder reported fiscal second-quarter EPS of $4.55, surpassing the consensus estimate of $4.06 by 12.07%. Quarterly sales came in at $2.837 billion, beating the estimate of $2.533 billion, representing 13.16% growth year-over-year.

“Based on these outstanding results, and with continued solid demand as we start our third quarter, we are increasing our full year revenue and earnings guidance. We now expect to earn approximately $14.00 per diluted share in fiscal 2024 with a return on beginning equity of approximately 22%.”, said Douglas C. Yearley, Jr., CEO of Toll Brothers.

The Toll Brothers CEO highlighted the company’s strong demand and robust financial performance, indicating confidence in sustained growth. Despite these optimistic projections, market skepticism appears to be weighing on the stock’s performance.

Toll Brothers raised its full-year outlook. The company now expects fiscal-year 2024 EPS to be approximately $14, up from the previous range of $13.25 to $13.75. The company anticipates third-quarter home deliveries of 2,750 to 2,850 units and increased its fiscal-year 2024 delivery forecast to a range of 10,400 to 10,800 units. Additionally, third-quarter adjusted home sales gross margin is projected at 27.7%. Toll Brothers also said it continues to expect 28% margin for the full year.

Despite the strong headline results, Wedbush analyst Jay McCanless reiterated a Neutral rating on Toll Brothers and maintained a price target of $105 on Wednesday, suggesting downside from current levels and concerns beyond the immediate financial performance.

TOL Price Action: Toll Brothers shares were down 8.08% at $119.70 at the time of publication, according to Benzinga Pro.

See Also: AI Boom: How Nvidia, AMD Growth Spurs Opportunities For Vertiv

Image: William Kedersha from Pixabay.