Wall Street downplays Toll Brothers’ strong earnings report

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Robert Wetenhall, a home builder analyst with RBC Capital Markets, appeared on CNBC this morning to discuss home builder Toll Brothers’ earnings report, which shows a 54 percent jump in profit today, and a 25-cent earning per share, beating analyst expectations by 20 cents. Though the stock was up 4 percent after the report was issued, it’s down more than 20 percent since February, according to CNBC, and Wetenhall remained bearish for the second half of the year. “There’s nothing from a data set, in terms of delinquencies, home prices or volume trends that has caused us to turn more positive,” he said. He attributed the better-than-expected earnings to tax treatment and insisted revenue was still light. Though Wetenhall praised Toll Brothers’ movement in Manhattan, which includes a $35 million purchase in Gramercy in June reported by The Real Deal, he downplayed the strength of the market in the city, and noted that fourth-quarter Wall Street bonuses would ultimately have the biggest effect on the housing market. “New York is a good place to be relative to other spots,” he said. “Is the New York market on fire? I think that would be a strong overstatement.”