The Toro Company TTC

Toro is a mid‑sized industrial franchise with a durable Professional moat in golf/grounds, irrigation, and underground construction, evidenced by mid‑teens ROIC/ROIIC and recent Professional margin prints above 20% (Key compounder indicators; Q3‑2025 earnings call). Its reinvestment runway—autonomy/connected irrigation, underground product refreshes, and AMP productivity—looks credible, while capital returns are meaningful though occasionally debt‑aided, and the balance sheet carries moderate leverage with solid coverage (Strategic initiatives; Cash flow statements (annual); Key financial ratios (trailing 12 months)). The main offsets are Residential cyclicality, tariffs/material costs, and elevated working capital that keep cash conversion and GAAP/adjusted spreads in focus (FY2025 Q3 10‑Q; Quality of earnings analysis). On valuation, a scenario DCF centers near $97 per share with bear and bull cases of roughly $61 and $136 respectively, versus a recent price near $73, placing emphasis on execution in Professional, the AMP 2.0 roadmap, and a Residential margin reset (Valuation; Company profile).