Overview

• U.S. outdoor equipment maker's fiscal Q2 net sales rose 8.1%, beating analyst expectations

• Adjusted EPS for fiscal Q2 rose 12.7%, beating analyst expectations

• Company raised full-year net sales and adjusted EPS guidance

Outlook

• Toro raises full-year net sales growth outlook to 4.0%-6.5% from 3.0%-6.5%

• Company now sees full-year adjusted EPS at $4.50-$4.62, up from $4.40-$4.60

• Toro expects to capitalize on opportunities in underground construction, landscape contractor and golf markets

Result Drivers

• BROAD-BASED DEMAND - Toro said strong demand across its portfolio drove Q2 results

• PRICE REALIZATION & PRODUCTIVITY - Margin improvement was primarily due to price realization and productivity gains, partially offset by higher material, manufacturing, and freight costs

• TORNADO ACQUISITION & HIGHER SHIPMENTS - Professional segment growth was driven by price realization, the Tornado acquisition, and higher shipments of underground construction equipment and zero-turn mowers

Company press release: ID:nBwwLB00a

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Sales	Beat	$1.42 bln	$1.39 bln (5 Analysts)
Q2 Adjusted EPS	Beat	$1.60	$1.50 (5 Analysts)
Q2 EPS		$1.50
Q2 Adjusted Net Income		$155.40 mln
Q2 Net Income		$145.40 mln
Q2 Gross Margin		33.90%
Q2 Gross Profit		$482.70 mln
Q2 Operating earnings		$195 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the heavy machinery & vehicles peer group is "buy"

• Wall Street's median 12-month price target for Toro Co is $117.00, about 28.6% above its June 3 closing price of $90.95

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 21 three months ago

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