Analyst Sam Reid from Wells Fargo maintained a Buy rating on Toll Brothers (TOL – Research Report) and decreased the price target to $150.00 from $170.00.
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Sam Reid has given his Buy rating due to a combination of factors that highlight Toll Brothers’ strong positioning in the market despite challenging conditions. One key factor is the company’s solid gross margin in the first quarter, outperforming expectations and demonstrating effective execution against a difficult backdrop. Additionally, Toll Brothers’ guidance for the second quarter and fiscal year 2025 reflects a conservative approach, which does not rely on improving incentives, indicating a stable operational strategy.
Moreover, Reid notes that Toll Brothers is strategically positioned with a balanced mix of speculative and build-to-order homes, which supports backlog conversion goals, albeit challenging. While there is some skepticism around delivery targets and shrinking backlogs, Reid suggests that the company’s ability to maintain a strong base across its communities is a positive sign. Furthermore, the lack of impact from external factors such as wildfires or tariffs provides additional confidence in the company’s resilience and adaptability in the current market environment.
According to TipRanks, Reid is a 3-star analyst with an average return of 3.6% and a 42.35% success rate. Reid covers the Consumer Cyclical sector, focusing on stocks such as KB Home, Mohawk, and DR Horton.
In another report released yesterday, Wedbush also maintained a Buy rating on the stock with a $175.00 price target.