Earnings Preview: Toll Brothers sentiment mixed ahead of Q1 results

Toll Brothers (TOL) is expected to report Q1 earnings on Wednesday, February 20 before the market open with a conference call scheduled for 2:00 pm ET. Toll Brothers is a designer and builder of luxury homes... EXPECTATIONS: Analysts are looking for EPS of 11c on revenue of $500.63M according to First Call. The consensus range for EPS is 2c-21c on revenue of $433M-$549.5M... LAST QUARTER: Toll reported Q4 EPS of $2.35 against estimates for 23c on revenue of $632.83M against estimates for $566.74M. On its Q4 earnings report, Toll said it expects to deliver 3,600-4,400 homes in FY13 at an average price of $595,000-$630,00. Management noted general economic trends were “encouraging” and contracts were up 34% thus far in FY13. Q2 margins were anticipated to be the highest of FY13... STREET RESEARCH: Street research has been mixed in the weeks leading up to Toll’s Q1 earnings report. On February 5, Barclays downgraded Toll to Underweight from Equal Weight, lowering their price target to $36 from $41. On February 4, Toll was removed from the short term buy list at Deutsche Bank. Stifel Nicolaus upgraded Toll to Hold from Sell on January 3, citing relative valuation and a secular recovery in housing. On January 10, BofA/Merrill reinstated Toll with a Buy rating and a price target of $42... PRICE ACTION: Toll’s shares have rallied approximately 13% since Q4 results were released in early December, making a fresh 52-week high of $38.36 in January. In early afternoon trading ahead of Wednesday's Q1 report, Toll is down 1.4%.