UPDATE: Goldman Sachs Reiterates Buy Rating, Raises PT on Toll Brothers
In a report published Monday, the Goldman Sachs Group reiterated its Buy rating on Toll Brothers (NYSE: TOL), and raised its price target from $32.00 to $46.00.
Goldman Sachs noted, “We increase our 2012-2014 revenue and EPS estimates to reflect our new home sales and pricing expectations. Our higher new home sales expectations translate to higher backlog growth and faster backlog absorption leading to the sales acceleration. The inherent leverage from fixed G&A expenditure lends to faster net income growth. Our target price time frame is now 12 months (from 6 months) to reflect our improved long-term view on the homebuilders. Our target price is based on normalized earnings and tax adjusted book value. We increase our target price to $46 from $32, as we raise our normalized EPS estimate to $5.01 from $3.09 and apply a 11X multiple (8.5X earlier). We apply a 2.05X multiple (unchanged) to tax adjusted book value.”
Toll Brothers closed on Friday at $30.71.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.