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Toll Brothers (TOL) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Toll Brothers (TOL - Free Report) closed at $80.10, marking a -0.67% move from the previous day. This change lagged the S&P 500's 0.02% loss on the day. Elsewhere, the Dow gained 0.23%, while the tech-heavy Nasdaq lost 0.12%.

Coming into today, shares of the home builder had gained 2.94% in the past month. In that same time, the Construction sector gained 7.6%, while the S&P 500 gained 5.14%.

Toll Brothers will be looking to display strength as it nears its next earnings release. On that day, Toll Brothers is projected to report earnings of $2.86 per share, which would represent year-over-year growth of 21.7%. Meanwhile, our latest consensus estimate is calling for revenue of $2.47 billion, down 1% from the prior-year quarter.

TOL's full-year Zacks Consensus Estimates are calling for earnings of $10.61 per share and revenue of $9.33 billion. These results would represent year-over-year changes of +6.74% and -9.24%, respectively.

Investors should also note any recent changes to analyst estimates for Toll Brothers. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Toll Brothers is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Toll Brothers's current valuation metrics, including its Forward P/E ratio of 7.6. Its industry sports an average Forward P/E of 10.09, so we one might conclude that Toll Brothers is trading at a discount comparatively.

Investors should also note that TOL has a PEG ratio of 0.69 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TOL's industry had an average PEG ratio of 0.83 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 19, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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