Shares of Toro Co. TTC scaled a new 52-week high of $89.99 on May 31, before settling lower at $89.31. Toro's share price has been on the rise since the company posted record second-quarter fiscal 2016 results on May 19. Further, its new product line-up for 2016 and positive outlook also led to stock price appreciation.
This Bloomington, MN-based provider of turf and landscape maintenance equipment as well as irrigation solutions for golf courses has a market cap of $4.86 billion. Average volume of shares traded over the last three months is approximately 312K. Toro has delivered a year-to-date return of around 22.77%. The company has outperformed the Zacks Consensus Estimate in all the four trailing quarters with an average positive surprise of 10.53%.
Growth Drivers
Toro reported record second-quarter fiscal 2016 (ended Apr 29) earnings of $1.89 per share which increased 15% from $1.64 in the year-ago quarter. Earnings surpassed both management’s guided range of about $1.75−$1.80 per share as well as the Zacks Consensus Estimate of $1.80. Toro's net sales of $836 million in the quarter increased 1% year over year.
Toro witnessed strong sales in the professional segment, particularly for landscape contractor and golf products at the beginning of the key selling season. The company is seeing positive momentum from the specialty construction business. There has been a strong demand for the new Dingo TX 1000 compact utility loader, which was well received by landscape contractors and rental houses alike. Overall, Toro remains focused on innovation, productivity and profitable growth.
Toro raised its net earnings per share guidance to the new range of $3.90−$4.00 from the prior band of $3.85−$3.95. The company, however, lowered its revenue growth guidance and expects it to be flat to up 2%. For the third quarter, the company expects net earnings per share to be about 95 cents.
At present, Toro has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the consumer discretionary sector include American Public Education, Inc. APEI, Belmond Ltd. BEL and Cable ONE, Inc. CABO. All these stocks sport a Zacks Rank #1 (Strong Buy).
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