Compass Point Sees Toll Brothers Inc. as Fairly Valued at Current Levels

In a report published Wednesday, Compass Point analyst Wilkes Graham reiterated a Neutral rating and $37.50 price target on

. In the report, Compass Point noted, "We reiterate our Neutral rating and $37.50 price target on shares of TOL. TOL reported strong 1Q15 earnings results highlighted by a 15 cent headline core EPS beat, 17.6% closings growth, 7.1% organic orders growth (versus the sector average of 1.2%), and nearly 13% ASP growth. Further, Management raised their FY2015 home delivery and ASP outlook ranges to 5,200-6,000 and $725- $760k, respectively. While Management remains optimistic about the housing market recovery given their robust earnings growth, land positions, continued strong sales (particularly in California), and projected delivery growth from City Living buildings in New York City in FY2016, we view the stock as fairly valued at current levels- particularly following the sizeable rally by the home builders and 4 months of 18% outperformance relative to the S&P (by way of what we can call an extended Hope Trade rally this winter)." Toll Brothers Inc. closed on Tuesday at $38.53.