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Category: The Toro Company (TTC)
Date: 17 December 2020 Stock price of Toro Company (TTC): $92.26 We take a look at the 4th quarter 2020 earnings report of The Toro Company a worldwide provider of innovative solutions for the outdoor environment. For the 4th quarter the group reported net sales of $841 million and net income of $72.2 million.
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Our strong fourth-quarter results were driven by continued sales growth in our residential segment and a rebound in our professional segment - Richard M. Olson, chairman and chief executive officer"
More About The Toro Company
With roots dating back to 1914, The Toro Company was built on a tradition of quality and caring relationships. Today, the company is a leading worldwide provider of innovative solutions for the outdoor environment including turf and landscape maintenance, snow and ice management, underground utility construction, rental and specialty construction, and irrigation and outdoor lighting solutions. Through a strong network of professional distributors, dealers, rental stores and retailers in more than 125 countries, we proudly offer a wide range of products across a family of global brands to help golf courses, professional contractors, underground construction professionals, groundskeepers, agricultural growers, rental companies, government and educational institutions, and homeowners – in addition to many leading sports venues and historic sites around the world.
Overview of The Toro Company's 4th quarter 2020 earnings report
FOURTH-QUARTER FISCAL 2020 FINANCIAL HIGHLIGHTS
FULL-YEAR FISCAL 2020 FINANCIAL HIGHLIGHTS
- Net sales of $841.0 million, up 14.5% from $734.4 million in the fourth quarter of fiscal 2019.
- Net earnings of $72.2 million, up 88.7% from $38.3 million in the fourth quarter of fiscal 2019; *Adjusted net earnings of $69.2 million, up 33.5% from $51.8 million in the fourth quarter of fiscal 2019.
- Reported EPS of $0.66 per diluted share, up 88.6% from $0.35 per diluted share in the fourth quarter of fiscal 2019; *Adjusted EPS of $0.64 per diluted share, up 33.3% from $0.48 per diluted share in the fourth quarter of fiscal 2019.
- As of October 31, 2020, the company had liquidity of about $1.1 billion.
FULL-YEAR FISCAL 2020 FINANCIAL HIGHLIGHTS
- Net sales of $3.38 billion, up 7.7% from $3.14 billion in fiscal 2019.
- Net earnings of $329.7 million, up 20.3% from $274.0 million in the prior-year period; *Adjusted net earnings of $327.7 million, up 1.1% from $324.3 million in fiscal 2019.
- Reported EPS of $3.03 per diluted share, up 19.8% from $2.53 per diluted share in fiscal 2019; *Adjusted EPS of $3.02 per diluted share, up 0.7% from $3.00 per diluted share in fiscal 2019.
- Returned $107.7 million to shareholders in dividends.
The Toro Company management commentary on their 4th quarter 2020 earnings report
BLOOMINGTON, Minn.--(BUSINESS WIRE)--Dec. 16, 2020-- The Toro Company (NYSE: TTC) today reported results for its fiscal fourth-quarter and full-year periods ended October 31, 2020.
“Our strong fourth-quarter results were driven by continued sales growth in our residential segment and a rebound in our professional segment,” said Richard M. Olson, chairman and chief executive officer. “Residential sales were robust across all channels with strong demand for our new product lineup, accentuated by refreshed branding, an extended selling season, and stay-at-home trends. Improved demand for our professional products reflected greater business confidence from our customers and increased home investments. The integration of our Venture Products acquisition added another strong brand with multi-season products, contributing incremental sales in the quarter.”
“Our momentum and continued investments position us well for success in the new fiscal year,” continued Olson. “We have a strong portfolio of businesses and deep customer relationships, a dedicated team and channel partners, and innovative products and emerging technologies aligned with customer needs. We will remain sharply focused on business execution as we continue to face uncertainty due to the ongoing pandemic.”
“We will build upon our Sustainability Endures platform, our commitment to making a positive impact worldwide. Throughout last year, we put this commitment into action as we transformed how we do work and reimagined our business model from product innovation and production through customer service and support, all while keeping each other safe. In addition, we remain committed to driving future results through our enterprise strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering people,” concluded Olson.
“Our strong fourth-quarter results were driven by continued sales growth in our residential segment and a rebound in our professional segment,” said Richard M. Olson, chairman and chief executive officer. “Residential sales were robust across all channels with strong demand for our new product lineup, accentuated by refreshed branding, an extended selling season, and stay-at-home trends. Improved demand for our professional products reflected greater business confidence from our customers and increased home investments. The integration of our Venture Products acquisition added another strong brand with multi-season products, contributing incremental sales in the quarter.”
“Our momentum and continued investments position us well for success in the new fiscal year,” continued Olson. “We have a strong portfolio of businesses and deep customer relationships, a dedicated team and channel partners, and innovative products and emerging technologies aligned with customer needs. We will remain sharply focused on business execution as we continue to face uncertainty due to the ongoing pandemic.”
“We will build upon our Sustainability Endures platform, our commitment to making a positive impact worldwide. Throughout last year, we put this commitment into action as we transformed how we do work and reimagined our business model from product innovation and production through customer service and support, all while keeping each other safe. In addition, we remain committed to driving future results through our enterprise strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering people,” concluded Olson.
OUTLOOK
The company is providing full-year fiscal 2021 guidance based on current visibility, although there continues to be considerable uncertainty given the potential effects of COVID-19 on demand levels and timing, its supply chain and the broader global economy.
For fiscal 2021, management expects total net sales growth in the range of 6.0% to 8.0% and *adjusted EPS in the range of $3.35 to $3.45 per diluted share. This estimated adjusted diluted EPS range excludes the benefit of the excess tax deduction for share-based compensation.
The company is providing full-year fiscal 2021 guidance based on current visibility, although there continues to be considerable uncertainty given the potential effects of COVID-19 on demand levels and timing, its supply chain and the broader global economy.
For fiscal 2021, management expects total net sales growth in the range of 6.0% to 8.0% and *adjusted EPS in the range of $3.35 to $3.45 per diluted share. This estimated adjusted diluted EPS range excludes the benefit of the excess tax deduction for share-based compensation.
The Toro Company (TTC) stock price history over the last 5 years
The image below, obtained from Google shows the stock price history of The Toro Company for the last 5 years and it's been a pretty good time for Toro Company stockholders over the last 5 years. 5 years ago the stock was trading at $36.70 and its currently trading at $92.26. That's a very strong return of 151% provided to The Toro Company stockholders over the last 5 years.
The stock of Toro Company is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Toro Company's stock is very positive at this point in time.
The stock of Toro Company is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Toro Company's stock is very positive at this point in time.
Latest stock valuation of The Toro Company (TTC)
So what is The Toro Company stock worth based on their 4th quarter 2020 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for BrightView at $64.90 a stock.
We therefore believe the stock of The Toro Company is overvalued at its current price of $92.26
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $64.90, thus a good entry point into The Toro Company would be at $58.40 or below.
We expect the stock of The Toro Company to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued at its current price. Since the stock of Toro is trading at well above our suggested entry point we rate the stock of Toro as a sell
We therefore believe the stock of The Toro Company is overvalued at its current price of $92.26
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $64.90, thus a good entry point into The Toro Company would be at $58.40 or below.
We expect the stock of The Toro Company to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued at its current price. Since the stock of Toro is trading at well above our suggested entry point we rate the stock of Toro as a sell
Next earnings release
It is expected that The Toro Company will release their 1st quarter 2021 earnings report in early March 2021
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