Market Overview

Toll Brothers Earnings Preview: What The Analysts are Saying

Toll Brothers (NYSE: TOL) is expected to release its fourth quarter 2013 and full year 2013 results prior to the market open on December 10. A scheduled conference call is set for 2:00 PM EST the same day.

The Street's consensus for the company's quarterly EPS is $0.42. The company pre-released certain fourth quarter numbers as part of the Shapell announcement which included fourth quarter revenues of $1.04 billion, up from $632.8 million a year ago. Average selling prices for its units totaled $703,000, above last year's $582,000 average.

On November 7, the company announced it will purchase Shapell's single family assets for $1.6 billion in cash. The deal is expected to close in the first quarter 2014.

Sterne Agee: Long Term catalysts in place, near-term catalysts insignificant

Jay McCanless, analyst at Sterne Agee holds a bullish view when it comes to the company's long term prospects, but holds a bearish view for the short term. “We see several long-term catalysts (City Living, Shapell, and merchant apartment construction) in place but we do not believe there is a near term catalyst that could cause shares to outperform the peer average,” he noted in an research report dated December 9.

See also: Luxury Real Estate Foreclosures Up 61% 

The analyst believes that the company's won't benefit from the Shapell deal until fiscal 2015 as the analyst views this as “another positive facet of an already attractive transaction.”

McCanless is expecting the company to report fourth quarter EPS of $0.46 a share and full year 2013 EPS of $0.89.

Shares are Underperform rated with a price target of $25.00, representing an expected decline of 24.2 percent based on December 9th opening price of $33.00.

Goldman Sachs: Focus will be on November trends

Eli Hackel, analyst at Goldman Sachs (NYSE: GS) issued a mix commentary on Toll Brothers in a research report dated December 9. “Toll's orders were lower than our original expectations while the company had higher deliveries. Housing sales data and commentary from other builders have indicated that demand improved during October post a slow September; we would be interested in the November trends in Toll's luxury segment,” the analyst wrote.

Hackel believes a key focus on the company's earnings will surround management's updates on potential land sales following the closing of the Shapell acquisition.

The analyst offered an updated full year EPS for 2013, 2014 and 2015 of $0.88, $1.67, $2.53, respectively.

Shares are Neutral rated with a 12 month price target of $36.50, representing an expected return of 9.5 percent based on December 9th opening price of $33.00.

Toll Brothers quarterly results will be followed by Hovnanian Enterprises Inc. (NYSE: HOV) who will be reporting its fourth quarter earnings on December 12. Other notable homebuilders earnings date include Lennar Corp. (NYSE: LEN) who will be announcing its fourth quarter earnings on December 18. Finally, KB Home (NYSE: KBH) will announce its fourth quarter earnings on December 20.

Posted-In: Eli Hackel Goldman Sachs homebuilders hovnanian enterprises Jay McCanless KB Home Lennar Corp Shappell Sterne Agee Toll Brothers acquiring Shappel Toll Brothers earningsEarnings News Previews Trading Ideas Best of Benzinga

 

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