NEW YORK (TheStreet) -- Toll Brothers' (TOL) - Get Report price target was increased to $41 from $40 at Deutsche Bank on Wednesday morning, after the company reported strong 2016 fiscal second quarter results yesterday.
The firm maintained its "buy" rating on the stock after the Horsham, PA-based builder and marketer of luxury homes reported earnings of 51 cents per share, on revenue of $1.12 billion for the second quarter. Analysts expected earnings of 46 cents per share.
Investors received the news with optimistic hope, as shares rose yesterday after the results were reported. Toll Brothers stock had been trading down since the end of April.
"Recently, fears about a slowdown at the high-end of the market have weighed on Toll's shares leading to low expectations heading in F2Q16. Results should alleviate these fears and help build confidence in Toll's ability to achieve both overall margin stability and moderate volume growth in FY16," Deutsche Bank analysts said in an investor note.
Yesterday, April housing data reported new-home sales accelerated at its fastest pace since the housing market crash of 2008. Sales of new, single-family homes rose 16.6% from March to a seasonally adjusted rate of 619,000.
In addition, the data showed median price of a new home increased 9.7% year-over-year to $321,100 last month.
Shares of Toll Brothers are down by 0.07 to $29.44 on Wednesday morning.
Separately, TheStreet Ratings rated Toll Brothers as a "hold" with a score of C.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon.
Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The primary factors that have impacted this rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures.
However, as a counter to these strengths, TheStreet Ratings also finds weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
You can view the full analysis from the report here: TOL