Toll Brothers downgraded to Neutral from Overweight at JPMorgan

JPMorgan analyst Michael Rehaut downgraded Toll Brothers (TOL) to Neutral from Overweight with a price target of $150, down from $166. After maintaining a positive homebuilder sector stance over the past two years, the firm is shifting to a “more cautious, less constructive approach” for 2025. JPMorgan anticipates a “significantly” less supportive demand/supply industry backdrop, saying builder fundamentals will likely feature margin and return on equity contraction during the upcoming year. Ina addition, stock valuations remain full, the analyst tells investors in a research note. The firm adjusted ratings as part of its 2025 outlook. Several key demand drivers for housing – specifically, rates, employment growth and affordability – are not expected to improve significantly in 2025, it contends.