Toll Brothers (TOL) Stock Forecast & Price Target

Toll Brothers is supported by a resilient luxury buyer base that has shown relative strength despite a challenging operating environment, with management noting no signs that the high end of the market is weakening versus the low end and citing insulation from macro headwinds through a meaningful cash-buyer mix and moderate leverage. The company’s latest results and guidance reinforce that resilience: FY3Q26 EPS of $2.97 beat expectations, home sale revenue was $2,652 million, adjusted home sale gross margin remained strong at 25.6% ex-option write-offs and interest, and FY2026 guidance was tightened to 10,500-10,600 deliveries with ASP raised to $995K-$1,000K while preserving 26.1% adjusted gross margin and a 480-490 community count. Fundamental upside is further supported by Toll Brothers’ advantaged positioning in well-located land, disciplined capital allocation, increasing share repurchases to $700 million, and a competitive niche in the upper end of the market that should help sustain above-average margins and returns over time.

Toll Brothers is viewed negatively because, despite its luxury positioning and strong land bank, its earnings outlook is still being marked down, with 2026 EPS lowered to $12.72 from $12.82 and 2027 EPS to $14.44 from $14.52, signaling only modest growth and limited operating leverage. The company’s core homebuilding business remains exposed to softer orders, with FY’26 orders now expected to rise just 5% to 10.4k units versus 10% previously, while the downside case assumes lighter volumes, sluggish pricing, and rising land costs that would compress gross margins and trigger an earnings shortfall. Even though revenue is projected around $10.6 BN on 10,813 CY’25 closings and management has shown some margin resilience through mix and incentive discipline, the combination of macro/rates pressure, late-stage spec risk, and potentially higher cost inflation makes the stock’s fundamentals look vulnerable.