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Toll Brothers Inc TOL

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Toll Brothers Continues to Enjoy Strong Pricing Power and Lighten Its Land Position

Analyst Note

| Brian Bernard, CFA, CPA |

Toll Brothers reported another strong quarterly performance as the no-moat-rated homebuilder continues to capitalize on the housing supply and demand imbalance in the United States. While the number of homes Toll delivered during its fiscal third quarter fell short of guidance (2,597 versus guidance of 2,675) and management lowered its full-year home delivery guidance to 10,100 homes (compared with 10,200-10,400), we view this modest shortfall as a symptom of labor and supply chain shortages rather than easing demand. Indeed, total new orders per community increased 20% year over year on a very tough prior-year comparison, and Toll's backlog now stands at 10,661 homes, which is 47% higher than last year, and the firm will likely end its fiscal year with the highest backlog in its history.

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Company Profile

Business Description

Toll Brothers is the leading luxury homebuilder in the United States with an average sale price well above public competitors'. The company operates in 50 markets across 24 states and caters to move-up, active-adult, and second-home buyers. Traditional homebuilding operations represent most of company’s revenue. Toll Brothers also builds luxury for-sale and for-rent properties in urban centers, primarily on the East Coast. It has its headquarters in Horsham, Pennsylvania.

Contact
1140 Virginia Drive
Fort Washington, PA, 19034
T +1 215 938-8000
Sector Consumer Cyclical
Industry Residential Construction
Most Recent Earnings Jul 31, 2021
Fiscal Year End Oct 31, 2021
Stock Type Cyclical
Employees 4,500

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