TOL
Toll Brothers, Inc.
$150.21
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Fair Value
Trading 22.7% below fair value
You pay
$150.21
Bear
$147.32
Fair
$194.21
Bull
$241.11
Bear
$147.32
-1.9%
$12.36 × 14x + net cash
Fair
$194.21
+29.3%
$12.36 × 18x + net cash
Bull
$241.11
+60.5%
$12.36 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($12.36)
Implied Market Multiple
12.2x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $169.63 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $194.21 per share.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing