The homebuilder projected deliveries of 11,200 units for the fiscal year that ends on Oct. 31, at an average delivered price per home of $950,000 to $960,000.
Toll Brothers (TOL) stock slipped 2% in premarket trading on Wednesday after flagging a weak demand outlook.
The homebuilder projected deliveries of 11,200 units for the fiscal year that ends on Oct. 31, at an average delivered price per home of $950,000 to $960,000. The delivery estimate marked a downward revision from the previous forecast of 11,200 and 11,600 homes. The pricing range was also slashed by $5,000 at the midpoint.
The weak outlook came despite Toll Brothers’ strong third-quarter earnings. The luxury homebuilder posted earnings of $369.6 million, or $3.73 a share, compared with $374.6 million, or $3.60 a share, for the same period a year earlier.
The bottom-line result also exceeded the Fiscal.ai-compiled consensus estimate of $3.60 per share.
“While affordability pressures and uncertain economic conditions persist, we are pleased with the resilience of our luxury business and more affluent customer base,” Douglas Yearley Jr. said in a statement.
Retail sentiment on Stocktwits about Toll Brothers was still in the ‘extremely bullish’ territory at the time of writing, while retail chatter was ‘high.’
“Toll is seeing the housing slowdown, too. Homes in the backlog are down 19% to 5,492,” Tracey Ryniec, Portfolio Manager and Equity Strategist at Zacks Investment Research, noted.
Demand for new homes has stayed under pressure due to still elevated interest rates. According to a report by the National Association of Homebuilders, builder sentiment has now been in negative territory for 16 consecutive months. It has hovered at a relatively low reading between 32 and 34 since May.
Stephanie Link, the Chief Investment Strategist at Hightower Advisors, noted that earnings were not perfect, but housing may have seen bottoming now.
Toll stock has risen 3.7% this year.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<