Toll Brothers downgraded to Market Perform from Outperform at Keefe Bruyette

Keefe Bruyette downgraded Toll Brothers (TOL) to Market Perform from Outperform with a price target of $164, down from $168. Heading into 2025, capital markets momentum and stabilization of commercial real estate values position the commercial real estate finance sector for recovery, the analyst tells investors in a research note. The firm says that while the office sector continues to undergo a secular correction with values down over 35%, it feels more positive about multifamily driven by “significant dry powder,” prices having declined, and a better supply/demand outlook. Keefe downgraded both D.R. Horton ((DHI) and Toll Brothers to Market Perform on valuation, saying higher rates could pressure incentives, gross margins, and orders. It recommends a pair trade long D.R. Horton, short Toll Brothers.