Bullish Shift for Toro: Longbow Flips to Buy with a $100 Target

The Toro Company (TTC), a global leader in turf maintenance equipment, irrigation systems, and landscape solutions, just received a notable vote of confidence from Longbow Research. The firm upgraded Toro from Neutral to Buy and set a new price target of $100—implying considerable upside from current levels. This upgrade comes at a time when Toro is navigating operational changes and sector headwinds, making the analyst’s conviction especially meaningful for investors. Analyst upgrades like this are critical inflection points, often signaling a shift in market sentiment or underlying business momentum, and they deserve close attention.

Key Takeaways

• Potential Upside: Longbow’s $100 target implies a 20.4% potential upside from the current $83.07 share price.

• Recent Price Momentum: Shares have surged nearly 5% today, potentially in response to the upgrade amid low recent trading volumes.

• Strategic News Flow: Toro is set to announce fiscal Q3 results on September 4, has just installed a new President/COO, and is restructuring non-core assets, all of which could impact near-term performance.

• Technical Readings: RSI is elevated (73.6), suggesting short-term overbought conditions but also strong momentum.

• Analyst Confidence: Longbow’s upgrade aligns with Toro’s improving operational focus and sector tailwinds—Longbow is respected for its thorough, fundamental research in industrials and machinery.

Longbow’s Upgrade: A Vote of Confidence from a Sector Specialist

Longbow Research has established itself as a specialist in the industrials and machinery sector, known for deep-dive, channel-based research and a reputation for independent, contrarian calls. Their upgrade to Buy on Toro—coupled with a $100 price target—marks a significant shift in sentiment and positions Toro as a top pick in the sector.

The upgrade is particularly notable for two reasons:

1. Research Depth: Longbow’s analysts have a history of identifying inflection points in cyclical stocks and are known for independent fieldwork rather than consensus-driven recommendations.

2. Sector Influence: While not the largest Wall Street name, Longbow’s calls often attract attention among institutional investors focused on industrials and machinery—amplifying the impact of their opinions on stocks like Toro.

“Longbow’s upgrade signals a recalibration of expectations for Toro’s end-market recovery and margin prospects. They’ve historically been early in calling inflection points in names like TTC.” – DeepStreet Analyst Desk

Toro Company: Market Position and Business Model

Toro is the backbone of professional landscaping, golf course maintenance, and municipal turf management. Its business model combines:

• Recurring Equipment Sales: Mowers, snowblowers, irrigation, and specialty vehicles to municipalities, golf courses, and commercial contractors.

• Aftermarket Parts and Service: High-margin, recurring revenue from maintenance and upgrades.

• Innovation: Ongoing expansion into autonomous mowing, precision irrigation, and smart landscaping solutions.

With a broad customer base and exposure to both cyclical (construction, public budgets) and stable sectors (residential landscaping), Toro’s end markets provide a blend of growth and resilience. The firm’s recent divestitures and management changes suggest a sharpening focus on core growth areas.

Financial and Stock Performance: Momentum Building

Recent Financials

Toro has weathered a challenging macro environment but emerged with improving fundamentals:

• Revenue (TTM): $4.24 billion

• Net Income (TTM): $332 million

• Operating Margin: 12.5%

• Free Cash Flow: $282 million (TTM)

• Debt: Manageable at 1.8x EBITDA

The company’s margin profile has consistently trended above sector averages, supported by aftermarket revenue and pricing power. Toro’s balance sheet flexibility has allowed it to pursue bolt-on acquisitions and innovation investment even during cyclical downturns.

Stock Price Action and Technicals

• Current Price: $83.07 (up 5% today)

• 52-Week Range: $62.34 (low, April 2025) – $93 (high, September 2024)

• Recent RSI: 73.6 (momentum strong, but caution on near-term overextension)

• VWAP (1Y): $77.82; Average Daily Volume: ~91,700 shares

• Sentiment Ratio: Evenly split with 48% up days vs. 52% down days, but the recent surge in price and volume suggests a bullish inflection.

The stock’s recent move above both the 20-day and 50-day moving averages (SMA_20: $75.75; EMA_20: $76.48) confirms technical strength. However, the overbought RSI points to possible short-term volatility—potentially creating entry points for long-term investors.

Recent News: Strategic Shifts and Catalysts

Key Developments (Last 30 Days)

• Q3 Earnings Announcement (Sept 4): Toro will soon report its fiscal third quarter, likely providing clarity on order trends and margin recovery. (Business Wire)

• Leadership Change: Edric C. Funk appointed as President and COO, effective September 1—signaling a focus on operational execution and innovation. (Business Wire)

• Portfolio Restructuring: Sale of the Trencor brand and auger boring operations under American Augers—indicative of Toro’s intent to shed non-core assets and refocus on high-growth, high-margin businesses. (Business Wire)

These moves highlight management’s proactive approach and could serve as positive catalysts in the coming quarters.

“With new leadership and portfolio streamlining, Toro is poised to capitalize on secular trends in sustainable landscaping and automation.” – DeepStreet Analyst Desk

Potential Upside: What Does 20%+ Mean for Investors?

At $83.07, Toro trades at a modest premium to its 1-year VWAP but well below its recent highs. Longbow’s $100 target reflects:

• A 20.4% potential upside from current levels—substantial in the context of the machinery sector.

• Multiple expansion potential if margins rebound or if Toro’s innovation pipeline drives new growth.

• Catalyst-rich near-term outlook with earnings, leadership transitions, and portfolio moves on deck.

For sophisticated investors, the key questions are:

• Will Q3 results and guidance validate Longbow’s bullish thesis?

• Can Toro sustain margin improvement despite sector headwinds?

• Will innovation and operational focus drive above-peer growth?

Risks and Considerations

While the upgrade and technical momentum are encouraging, risks remain:

• Short-term overbought technicals could trigger profit-taking.

• Execution risk around new leadership and post-divestiture integration.

• Sector cyclicality—municipal and construction capex can be volatile.

Conclusion: Toro’s Inflection Point and Analyst Endorsement

Longbow’s upgrade of Toro to Buy with a $100 price target is a strong endorsement, especially given their reputation for independent, sector-focused research. With strategic changes underway, upcoming earnings, and a substantial upside to the new price target, Toro is at a potential inflection point. Investors should watch closely for confirmation of operational progress and margin recovery in the upcoming quarter.

Toro’s transformation story, now validated by a respected analyst firm, puts this under-the-radar machinery leader squarely on the watchlist for investors seeking upside in a market searching for new momentum.