Toll Brothers Stock Gets Overdue Bull Note

TOL is overdue for more price-target hikes

Managing Editor
Feb 25, 2020 at 10:39 AM
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The shares of Toll Brothers Inc (NYSE:TOL) are down 0.1% to trade at $46.90 this morning, despite a bull note from SunTrust Robinson. The brokerage firm hiked its price target to $47 from $37, in line with the homebuilding stock's closing perch yesterday of $46.98.

Homebuilding stocks like Toll Brothers were one of the strongest groups in 2019, and that has carried over into 2020. TOL is up 19% year-to-date, and remains a chip-shot from its Feb. 11 annual high of $49.31. And while the shares dropped yesterday with the broad market sell-off, the damage was contained by their ascending 20-day moving average.

There's ample room aboard the bullish bandwagon. There are 11 brokerages covering TOL, and nine rate it a "hold" or "strong sell." Plus, the consensus 12-month price target of $43.71 is a 7% discount to last night's closing perch. More price-target hikes or an upgrade could keep the wind at the security's back. 

A short squeeze could also fuel additional gains. Short interest increased by 27.1% in the two most recent reporting periods to 8.45 million shares, the most since October 2018. This takes up a healthy 7% of TOL's total available float, and 4.5 days' worth of buying power, at the stock's average pace of trading.

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