Last week, they reported a fine quarter, but not their guidance. Their backlog is slipping 7% year over year, though better than expected. They guided the current quarter that fell short for Wall Street. The CEO noted that the housing market was soft in September and October, but climbed in November after the election gave homebuyers clarity. Also, the wealth transfer from parents to Millennial homeowners is underway. TOL is up 30% this year. Bottom line: TOL appears to be working harder than the street expected to maintain numbers in a tepid housing environment. Shares are down 15% in the past week.
The top stock in this sector, though has pulled back 20% since its August high. It got hit hard after reporting a weak quarter, missing and cutting full-year guidance, then hit again after the election with the perception that the new White House doesn't like weight-loss drugs. The street read their quarter that demand for its weight-loss drug was impaired, but he disagrees--there's no problem with demand, just a supply issue. Now, is a buying opportunity.
Stock has been hot since the summer when the new CEO took over, then they got approval for their schizophrenia drugs. (Abbvie's drug failed last month.) But BMY has fallen 9% in the past 4 weeks--maybe because of concerns over the group, not the stock. Trades at only 7.9x PE 2025, and pays a 4.4% dividend which just increased last week. The stock is dirt cheap.
Is up 89% for the year. Investors don't care that analysts were cautious over this stock for its 50x PE.