Toll Brothers Q3 Earnings Preview: Will Kamala Harris' 3 Million Homes Plan Boost Homebuilder Stocks?

Homebuilder Toll Brothers Inc TOL could provide clues on how the housing market is fairing and how the 2024 election could benefit the company when third-quarter financial results are reported after market close Tuesday.

Earnings Estimates: Analysts expect Toll Brothers to report third-quarter revenue of $2.71 billion, according to data from Benzinga Pro.

The company reported revenue of $2.69 billion in last year's third quarter. Toll Brothers has beaten analyst revenue estimates in nine of the last 10 quarters, including seven straight quarters.

Analysts expect the company to report third-quarter earnings pre share of $3.31, versus $3.73 reported in last year's third quarter. The company has beaten earnings per share estimates from analysts in 9 of the last 10 quarters, missing in the most recently reported second quarter.

Guidance from the company calls for home deliveries of between 2,750 and 2,850 units in the third quarter.

Read Also: Housing Prices Hit New All-Time Highs But Could Hit A Wall Soon, Despite Lower Mortgage Rates

Key Items to Watch: Toll Brothers' third quarter report comes with analysts lowering price targets over the last two months. Here are recent analyst ratings on Toll Brothers.

• Seaport Global: Downgraded from Neutral to Sell with $108 price target
• Evercore ISI: Maintained Outperform rating, raised price target from $177 to $180
• Barclays: Maintained Underweight rating, lowered price target from $118 to $116
• Citigroup: Maintained Neutral rating, lowered price target from $133 to $125

Earnings from Toll Brothers will come after both Home Depot and Lowe’s have reported their quarterly results. Analysts and investors are weighing if the housing market concerns of high prices are causing more consumers to complete home repairs and stay in their current homes. Commentary on new home builds and sales could help factor into the debate.

The homebuilder is reporting quarterly results less than a week after presidential candidate Vice President Kamala Harris made homeownership one of the key platforms in her bid to win the 2024 election.

Harris said homeownership is "out of reach" for many American families, with a housing shortage one of the key reasons.

Harris shared plans to launch a $25,000 credit for first time homebuyers on the purchase of a new home and a plan to build three million new homes in four years.

Commentary on how this plan could benefit homebuilders and the feasibility of achieving the three million goal would be crucial for investors and analysts evaluating the homebuilder sector’s potential if Harris wins the election.

Given that Toll Brothers is more focused on the luxury segment, while Harris’s plan emphasizes middle-class affordability, such analysis could indicate whether competitors might stand to gain more from the proposed policies. This perspective would help investors understand which companies in the sector are best positioned to benefit from the plan’s implementation.

Toll Brothers raised guidance for full-year revenue and earnings after reporting second-quarter financial results. Reaffirming or raising guidance once again could point to a strong close to the fiscal year.

TOL Price Action: Toll Brothers stock is up 3.2% to $133.54 on Monday, versus a 52-week trading range of $68.08 to $146.75. Toll Brothers stock is up 29.4% year-to-date and up 66% over the last year.

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Image created using artificial intelligence via Midjourney.