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Investing.com - RBC Capital has raised its price target on Toll Brothers (NYSE:TOL) to $145.00 from $133.00 while maintaining an Outperform rating on the luxury homebuilder’s stock. The company, currently valued at $12.76 billion, trades at an attractive P/E ratio of 9.55x and maintains a strong financial health score according to InvestingPro analysis.
The firm adjusted its fiscal year 2025 earnings per share estimate upward by 1%, while reducing its fiscal 2026 estimate by 4%. RBC attributed the 2026 decline to softer orders and a shrinking backlog, partially offset by stronger average selling prices.
RBC noted that Toll Brothers’ management is balancing pace and price, while the luxury segment continues to perform well. The overall results and guidance were described as relatively in line with investor expectations.
The investment bank found recent deposit and incentive commentary "somewhat encouraging" but approached this with caution given continued market volatility and the seasonally slow period in the housing market.
Despite expressing general caution on the homebuilding sector, RBC favors Toll Brothers’ relative positioning, citing its strong land bank, high-end market niche, and capital deployment strategy.
In other recent news, Toll Brothers reported strong financial results for the third quarter of 2025, exceeding analysts’ expectations. The luxury homebuilder achieved earnings per share of $3.73, surpassing the forecasted $3.60, and generated $2.9 billion in revenue, beating the anticipated $2.86 billion. These results have bolstered investor confidence in the company’s performance. Wells Fargo (NYSE:WFC) responded by raising its price target for Toll Brothers to $160, maintaining an Overweight rating, citing improved performance in June and July as key factors. Additionally, UBS reiterated its Buy rating with a $183 price target, expressing optimism about the company’s prospects heading into 2026. Despite some concerns about the fourth-quarter outlook, UBS remains positive about the broader setup for Toll Brothers and the homebuilding sector. These developments highlight the company’s strong financial position and positive analyst sentiment.
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