Toll Brothers fell about 2 percent today and has drifted slightly lower over the past month, leaving it just a few dollars below its recent high. There was no big company news today, so this looks like ordinary movement in a quiet week for the stock.
Our view
The company continues to open new luxury communities at a steady clip, which is the engine that drives its growth. If you have been thinking about buying, the current price is a reasonable one to pay for a business that handles high interest rates better than most builders.
New luxury community opens in Sea Bright, New Jersey
The company continues to expand its footprint in high-end coastal markets with the opening of Haven at Sea Bright. This community sits along the Shrewsbury River and offers buyers proximity to the beach, fitting the company's strategy of targeting wealthy buyers in desirable locations. Opening new communities is a key part of the plan to grow home deliveries. Because these buyers are often less sensitive to interest rate changes, these niche luxury developments help the company maintain its high profit margins even when the broader housing market slows down.
Luxury master-planned community opens near Boise, Idaho
The company has launched a new luxury community in the Boise area, which has been a high-growth region for homebuilding. The development includes resort-style amenities and multiple home styles, aimed at capturing demand from buyers looking for an upscale lifestyle outside major metro hubs. Expanding the number of active communities is essential for the company to hit its goal of delivering over 11,000 homes a year. This steady rollout of new projects shows the company is successfully putting its large land bank to work.
The company scheduled its next earnings update for later this month. Management will discuss the results for the quarter that ended in July and likely provide an updated outlook for the rest of the year. Investors will be watching for two main things: whether profit margins on home sales stayed above 27 percent and if the company is seeing any change in demand from its wealthy customer base as interest rates fluctuate.
Analysts at Citigroup raised their rating on the homebuilder, arguing that it is better positioned than peers in the current environment. They pointed to a "K-shaped" recovery, where wealthier buyers continue to spend even as other parts of the economy struggle.
This supports our view that the company's focus on the luxury niche provides a cushion. While high interest rates can hurt mass-market builders by making monthly payments unaffordable for many, Toll Brothers' customers often have more wealth to weather those costs, allowing the company to maintain its sales pace and pricing power.
Toll Brothers analyst price targets
Analysts have recently issued a mix of upgrades and target adjustments as the company prepares for its upcoming earnings call. Most analysts, 23 of 46, rate the stock a buy, with an average target price suggesting 12% upside.
Average target$169.63+12%vs $151.33 today
TodayAvg price
Low $122High $187
Buy46 analysts
2Bearish
21Neutral
23Bullish
FirmRatingPrice TargetDate
Barclays
Underweight
$115→$122
7/14/2026
Argus Research
Buy
$165→$170
6/2/2026
UBS
Buy
$198→$187
5/21/2026
RBC Capital
Outperform
$161→$158
5/21/2026
Evercore ISI
Outperform
$176→$185
5/21/2026
Truist Financial
Buy
$190→$170
4/16/2026
Truist Financial
Buy
$190
3/3/2026
RBC Capital
Outperform
$144→$161
2/19/2026
UBS
Buy
$181→$198
2/19/2026
Evercore ISI
Outperform
$145→$174
2/19/2026
Oppenheimer
Outperform
$177→$180
2/19/2026
Wells Fargo
Overweight
$170→$185
2/19/2026
Toll Brothers earnings
Management has a very consistent habit of clearing the bars they set, beating profit expectations in six of the last eight quarters.
Earnings history
EstimateBeatMiss
Toll Brothers past earnings results
Expected
Actual
Surprise
EPS
$2.58
$2.72
+5.4%
Revenue
$2.42B
$2.53B
+4.8%
Key highlights
Home delivery volume lower: The company delivered 2,491 homes in the quarter, which is a 14% decrease from the 2,899 homes delivered a year ago. Even with fewer houses handed over to buyers, revenue reached $2.51 billion and topped the company's own expectations by approximately $110 million.
Stronger demand for luxury: The average price of a delivered home rose to $1,009,000, up from $933,700 last year, as the company focuses on its niche of wealthy buyers. New signed contracts also rose 7% in units to 2,834 homes, showing that affluent customers are still willing to commit to high-end builds despite the current market.
Community count expanding: The number of active selling communities grew 9% to 459 locations compared to 421 a year ago. Management plans to use its land holdings to continue growing this count between 8% and 10% in 2027 and beyond, which is the primary way the company reaches more buyers.
Profit margins tightening: Adjusted home sales gross margin, which is a measure of profit after building costs, fell to 26.2% from 27.5% a year ago. This drop happened partly because the company recorded $32.5 million in inventory write-offs, meaning the value of some land or projects was reduced on the books.
Full year outlook raised: Management raised its full year guidance and now expects to deliver between 10,400 and 10,700 units at an average price near $1,000,000. These higher targets for the year show confidence that the spring selling season is performing well enough to offset the slower start to the year.
Our take: This was a resilient quarter that proved the luxury buyer is still active even as the broader housing market faces pressure. While the company delivered fewer homes than last year, the record high prices and rising contract numbers suggest the brand is maintaining its premium status. This performance reinforces the long-term case for the stock.
