Toll Bros. (TOL) PT Raised to $169 at Evercore ISI
Evercore ISI analyst Trey Morrish raised the price target on Toll Bros. (NYSE: TOL) to $169.00 (from $167.00) while maintaining a Outperform rating.
The analyst comments "Toll Brothers (TOL) reported 2Q25 (April) adjusted diluted EPS of $3.58, excluding $8mm in land and homebuilding impairments, and $1.7mm in option write-offs, versus our $3.00 estimate and Street consensus of $2.83. Overall, it was a strong quarter, with beats on gross margins (27.5% vs. 27.25% est.), closings (2.9k vs. 2.7k est.), and SG&A (9.5% vs. 10.2% est.). Orders of 2,650 missed our 3,406 estimate, as did ASP ($934k vs.$952k est.); however, the company nevertheless guided to a solid 3Q25 ASP and reiterated its prior FY25 guidance across all metrics. Notably, the company repurchased significantly more shares than we had expected. TOL executed well in the quarter, with strong margin results and guidance. The company noted that they will continue to prioritize price over pace and that they are reducing land spend on new deals, which aligns well with our “Less is More” thesis for the group, with builders prioritizing margins, cash flow and share repurchases over volume growth. As for capital allocation, the company’s repurchases beat expectations, and guided 2025 higher. Overall, TOL’s quarter showcased the company’s resilience amidst tough market conditions. We continue to believe that the pessimism around the builders is overdone, and that their sensible capital allocation decisions this year will ultimately drive a rerating in the large-cap builder shares once consumer confidence is restored. Following 2Q25, we adjust our FY25 EPS to $14.51 (from $14.32) and our FY26 EPS to $14.90 (from $15.11). We reiterate our Outperform rating on the shares with a target price of $169, based on 11.5x our FTM earnings estimate."