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The Toro Company: A Baby Bull Market Is Gaining TractionToro NYSE: TTC is positioning its professional businesses, underground infrastructure operations and technology investments as key drivers of future growth, incoming Chief Executive Officer Edric Funk said at D.A. Davidson’s Diversified Industrials & Services Conference in Nashville.

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Funk, who is currently Toro’s chief operating officer and will become CEO on Nov. 1, described the company as a supplier of products serving land management, irrigation, underground infrastructure and snow removal markets. While Toro is widely associated with lawn mowers, he said its strategic emphasis is on professional customers, including golf-course operators, landscape contractors, municipalities and underground construction companies.

The 8 best agricultural ETFs to consider for your portfolio“We exist to help our customers enrich the beauty, productivity, and sustainability of the land,” Funk said. He noted that Toro products are used in parks, athletic fields, golf courses, residential properties and infrastructure projects.

Infrastructure and Professional Markets Funk highlighted Toro’s underground specialty construction business, including the Ditch Witch brand acquired through the company’s purchase of Charles Machine Works. He said the business serves demand related to power, water and fiber infrastructure, as well as data-center development.

Toro Stock is Worth Getting Off Season According to Funk, underground infrastructure demand extends beyond data centers, supported by new development, aging U.S. infrastructure and efforts to expand high-speed internet access. He cited the need to repair and replace water systems, noting an American Society of Civil Engineers estimate that 6 billion gallons of drinking water are lost daily between treatment plants and consumers’ taps.

The company also sees its BOSS snow-removal business as complementary to its landscape operations. BOSS sells truck-mounted plows and sidewalk-clearing equipment. Funk said the business carries attractive, accretive margins and benefited from a stronger snow season that helped reduce channel inventory. Toro is seeing “nice load into the channel” ahead of the coming winter season, he said, while emphasizing a disciplined approach to production and forecasting.

Productivity Program and Earnings Outlook Funk acknowledged that Toro has operated through a difficult period marked by unusual post-pandemic demand, supply-chain disruption and inflation. However, he said the company has improved inventories, expanded margins and generated more than 120% free-cash-flow conversion.

Toro’s AMP productivity initiative was initially intended to produce $100 million in annual run-rate savings. The company later raised that objective to $125 million and has already achieved that level, Funk said. He characterized the savings as permanent and durable, adding that the formal initiative will end with the current fiscal year but that productivity efforts will remain part of the company’s culture.

The company expects to return to double-digit earnings growth, according to Funk. He said Toro is focused on continued productivity, margin expansion and capitalizing on healthy end markets. Its residential business, while a smaller portion of the company, has returned to a path toward double-digit margins, he said.

Technology, Golf and Automation Golf remains an important market for Toro, which Funk said is the only supplier offering both golf-course equipment and irrigation systems. The company is increasingly integrating those offerings, including technology that can collect moisture data while equipment moves around a course and feed recommendations into irrigation controls.

Funk said golf participation has remained strong following a pandemic-era boost, with increased involvement from younger players, women and other previously underserved demographics. He cited full private-club memberships, waiting lists and high demand for tee times as signs of ongoing investment across the industry.

The company is also seeing continued adoption of electrified golf equipment. Funk said electric greens mowers offer benefits beyond reduced exhaust emissions, including lower noise and reduced risk of hydraulic leaks. Toro’s recently launched all-electric greens roller sold out for the year, he said, prompting plans to increase production.

On autonomous mowing, Funk said Toro has commercialized many of its solutions within the past year and is gaining momentum. He said customers are primarily looking to redeploy workers from routine tasks to higher-value work rather than simply eliminate labor.

“This isn’t a matter of if, it’s a matter of when we see that significant escalation,” Funk said of autonomous technology adoption. Toro expects autonomous products to command higher prices and, over time, provide opportunities for margin expansion, he added.

Leadership Transition and Acquisitions As he prepares to succeed current CEO Rick Olson, Funk said Toro’s strategy will combine “continuity balanced with evolution.” He plans to preserve the company’s focus on brands, customer relationships, innovation and disciplined execution, while placing greater emphasis on commercializing and accelerating adoption of technologies such as autonomous equipment, connected products and alternative-energy solutions.

Funk also said acquisitions will remain part of Toro’s strategy, particularly in professional markets and underground infrastructure. He pointed to the company’s acquisition of Tornado Infrastructure Equipment Ltd., a Canadian manufacturer specializing in vacuum excavation equipment, as an example of a transaction that has exceeded expectations.

Tornado’s equipment uses high-pressure water and vacuum systems to expose existing infrastructure and support installation work. Funk said the acquisition expanded Toro’s reach in Canada and complements Ditch Witch’s horizontal directional drilling operations.

Funk said Toro has a “robust pipeline” of acquisition opportunities but will be selective, prioritizing cultural fit, returns and strategic alignment. He added that the company’s balance sheet remains strong, with a leverage ratio of 1.3 times, providing flexibility for future investments.

About Toro (NYSE:TTC)The Toro Company NYSE: TTC is a Minnesota-based manufacturer of equipment and solutions for maintaining outdoor environments. Founded in 1914, the company serves professional and residential customers through products sold under brands including Toro, Exmark, and BOSS.

Toro's product portfolio includes turf and landscape maintenance equipment, commercial and residential lawn mowers, irrigation systems, outdoor lighting, utility vehicles, compact utility loaders, and equipment for snow and ice management.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Key Takeaways Toro is leveraging its AMP productivity program to boost efficiency and generate cost savings.Toro is investing in AI, autonomous solutions and smart-connected products to drive innovation.Toro is expanding underground construction, parts and services while pursuing disciplined acquisitions. The Toro Company (TTC - Free Report) is likely to post a year-over-year increase in its top and bottom lines when it reports third-quarter fiscal 2026 results on Sept. 3, before market open. The Zacks Consensus Estimate for quarterly earnings is pegged at $1.30 per share, indicating an increase of 4.8% from the prior-year number. The consensus estimate for earnings has been stable in the past 30 days.

The consensus estimate for quarterly revenues is pegged at $1.2 billion, indicating a rise of 5.2% year over year.

In the last reported quarter, the company delivered an earnings surprise of 6.7%. It has a trailing four-quarter earnings surprise of 7%, on average.

Factors Likely to Have Impacted TTC’s Q3 EarningsToro’s quarterly results are expected to reflect benefits from the ongoing execution of its strategic efforts. It is focused on driving growth through its AMP productivity program, which leverages lean principles, Kaizen events and continuous improvements to generate cost savings and improve operational efficiency. In addition, the company is seeing strength across its Toro, Exmark and Ventrac brands.

The company is also streamlining its manufacturing footprint, workforce and product portfolio to strengthen margins and offset inflationary and tariff pressures. Toro is increasing investments in electrification, smart-connected products, autonomous solutions, Artificial Intelligence and advanced manufacturing technologies to enhance product innovation and efficiency.

The company is expanding its underground construction business through strong demand for Ditch Witch equipment and the integration of Tornado, while also seeking to increase parts and service penetration. In golf, Toro is advancing autonomous solutions to help customers improve productivity and address labor constraints. The company also remains open to disciplined acquisitions, particularly in the Professional segment, where it can leverage existing capabilities and technology to enter adjacent markets. All the aforesaid factors are likely to boost TTC’s results in the quarter under review.

The Zacks Consensus Estimate for Professional and Residential segments’ sales is pegged at $983 million and $197 million, respectively, showing year-over-year increases of 5.6% and 2.1%.

On the flip side, Toro continues to face headwinds, including higher material and fuel costs, tariff expenses, inflation and challenging consumer confidence. Residential demand remains pressured by cautious consumers, with some homeowners trading down to lower-priced products, while weakness in European residential markets is also weighing on international performance.

What the Zacks Model Unveils for TTCOur proven model does not conclusively predict an earnings beat for Toro this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Toro has an Earnings ESP of 0.00% and a Zacks Rank of 3. You can uncover the best stocks before they're reported with our Earnings ESP Filter.

TTC’s Valuation PictureFrom a valuation perspective, Toro’s shares are trading at a premium relative to the industry benchmarks. The stock has a forward 12-month price-to-earnings ratio of 20.29X, above the five-year median of 19.26X and the Tools - Handheld industry’s average of 19.57X.

The recent market movements show that Toro shares have gained 0.9% in the past six months compared with the industry's 3% growth.

Stocks With the Favorable CombinationHere are some companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Boyd Gaming Corporation (BYD - Free Report) currently has an Earnings ESP of +0.43% and a Zacks Rank of 3. BYD is likely to register a top-line decrease when it reports third-quarter 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1 billion, indicating a 0.04% drop from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for BYD’s third-quarter earnings is pegged at $1.74 a share, implying a 1.2% rise from the year-earlier quarter. BYD has a trailing four-quarter average earnings surprise of 5.4%.

Cintas Corporation (CTAS - Free Report) currently has an Earnings ESP of +0.09% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter fiscal 2027 earnings per share is pegged at $1.35, which implies 12.5% year-over-year growth.

The consensus estimate for quarterly revenues is pegged at nearly $3 billion, implying 9.2% year-over-year growth. CTAS has a trailing four-quarter earnings surprise of 1.8%, on average.

Carnival (CCL - Free Report) currently has an Earnings ESP of +0.32% and a Zacks Rank of 3. CCL is likely to register growth in its top line when it reports third-quarter fiscal 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $8.4 billion, indicating a 2.6% increase from the figure in the year-ago quarter.

 The consensus estimate for CCL’s earnings is pegged at $1.36 per share, implying a 4.9% drop from the year-ago quarter’s actual. CCL displays a trailing four-quarter earnings surprise of 18.2%, on average.