Toll Brothers Stock Takes a Pre-Earnings Breather

The security usually does well after its earnings report

Fernanda Horner

Digital Content Manager

Dec 5, 2022 at 10:13 AM

Toll Brothers Inc (NYSE:TOL) is expected to report fiscal fourth-quarter earnings after the close on Wednesday, Dec. 7, with Wall Street anticipating profits of $4.01 per share. Analysts are on the fence ahead of the event, with seven of nine firms in question carrying a tepid "hold" rating. At last check, TOL is down 1.2% to trade at $47.33.

The security has an impressive record of post-earnings moves, however. The shares have ended six of eight next-day sessions higher, including an 8% pop in May. TOL averaged a move of 4.6% during the past two years, regardless of direction, and this time around the options pits are pricing in a bigger swing of 7.6%.

Long puts have been more popular than usual in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day put/call volume ratio of 3.26 sits in the 68th percentile of its annual range.

Digging deeper, the $50 level rejected the equity's latest rally, but a floor remains at the $45 region. Plus, the 60-day moving average emerged as support in early November, and Toll Brothers stock has added 12% quarter-to-date, despite still carrying a 33.8% deficit so far in 2022.

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