TTC – Market expectations are for Uniform ROA to compress, but management is confident about the Revolution product line, capacity, and shareholder returns
- The Toro Company (TTC) currently trades below corporate, yet near historical averages relative to Uniform earnings, with an 18.5x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to compress to 20%, accompanied by 3% Uniform asset growth.
- Meanwhile, analysts expect Uniform ROA to remain stable at 24% levels through 2023, accompanied by 8% Uniform asset growth.
- If sustained going forward, these levels would imply a stock price closer to $126, representing significant potential equity upside for the firm.
- Moreover, the firm’s most recent earnings call suggests management is confident about the Revolution product line, capacity, and shareholder returns.