TOL
Toll Brothers, Inc.
$134.32
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Moderate
·
Conviction
Undervalued
Trading 39.6% below fair value
You pay
$134.32
Bear
$173.04
Fair
$222.48
Bull
$271.92
Bear
$173.04
+28.8%
$12.36 × 14x
Fair
$222.48
+65.6%
$12.36 × 18x
Bull
$271.92
+102.4%
$12.36 × 22x
Adjust Assumptions
18.0x
12.36$
Key Value Driver
Through-cycle normalized EPS ($12.36)
Implied Market Multiple
10.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (46 analysts)
$167.67
Divergence from AlphaVal
33%
Summary
Using 7-year normalized EPS of $12.36 at a 18x cycle multiple, the base-case value is $222.48 per share. P/TBV cross-check: 1.5x.
Warnings
Wall Street's average price target is $167.67 (from 46 analysts). Our estimate is 33% above the consensus -- consider that gap carefully.
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