- Toro delivered record fiscal 3Q results but barely raised EPS guidance for the year. Sales guidance for 4Q looks good, implying a big drop in margins.
- The company is seeing inflation across the board including materials, labor, and transportation. It is expected to cool next year but timing is uncertain.
- Toro is still trading at a high multiple of earnings relative to earnings growth. The demand is there for EPS growth to pick up when inflation settles down.
- The stock is worth holding for long-term investors but inflation headwinds may create better buying opportunities over the next few months.
For further details see:
Inflation Will Mow Down Toro's Margins Next Quarter