“Our weighted average share count is expected to be approximately 112.5 million for the first quarter and 110 million shares for the full 2023 year.”

Why this grade

Management raised full-year 2023 weighted average share count guidance from approximately 110 million to approximately 111 million shares before the commitment came due. A higher share count is worse for shareholders (more dilution), so this revision represents a miss against the original commitment.

Deviation basis: percent increase from the original 110 million share guidance to the revised 111 million share guidance

In context

“project SG&A as a percentage of home sales revenues to be approximately 11.3% and expect total dollar spend to be flat with 2022. Other income, income from unconsolidated entities and land sales gross profit is expected to be approximately $10 million in the first quarter and $125 million for the full year. Much of this full year income is projected from sales of our interest in certain stabilized apartment communities developed by Toll Brothers Apartment Living in joint venture with various partners. While the market for rental properties is currently being disrupted by the volatility in rates and economic uncertainty, we do project selling our interest in four of our joint ventures by the end of the fiscal year. We project the first quarter and full year tax rate of approximately 26%. Our weighted average share count is expected to be approximately 112.5 million for the first quarter and 110 million shares for the full 2023 year. This assumes we repurchased a targeted $100 million of common stock per quarter. Based on land we currently own or control, we expect to grow community count by 10% by the end of fiscal year 2023. Putting this all together, that works out to be between $8 and $9 per share for the full year which would move our book value to above $60 at fiscal year-end 2023. With that, I will turn the call back over to Doug. Douglas Yearley: Thank you, Marty. We continue to believe that the long-term prospects for the housing market remain positive despite the recent market weakness. Demographic and migration trends continue in our favor. In addition, there continues to be a substantial shortage of homes in America as how the starts have not kept up with population growth for at least the past 15 years.”