Fitch turns Toll Brothers view to positive

Fitch Ratings said it affirmed Toll Brothers, Inc.'s ratings, including the BBB- issuer rating, and revised the outlook to positive from stable.

“The outlook revision to positive reflects the company's more conservative posture in 2021 by meaningfully reducing debt and pivoting to a more land-light strategy. This has resulted in improving credit metrics, including net debt to capitalization of 27.7% at FYE 2021. This is below Fitch's positive rating sensitivity of net debt to capitalization sustained below 35%,” the agency said in a press release.

The outlook also reflects an expectation that Toll will likely deliver solid cash flow from operations in most periods during the housing cycle as it shortens its land position and manages a 50/50 mix of owned vs. optioned land, Fitch said.

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