Toll Brothers (TOL) has climbed ahead of the broader market as investors lean into rising expectations for its December 8 earnings, supported by a fresh upgrade from JP Morgan and steady growth in its luxury community pipeline.
See our latest analysis for Toll Brothers.
The latest pullback in the share price to $138.94 comes after a solid run, with an 11.54% year to date share price return and a powerful 193.58% three year total shareholder return suggesting longer term momentum is still very much intact.
If Toll Brothers has you rethinking where growth could come from next, it might be worth scanning auto manufacturers for other cyclical names that are starting to build similar momentum.
With shares trading below both Wall Street targets and some intrinsic value estimates, yet up strongly over three years, the key question now is whether Toll Brothers is still mispriced or if the market is already baking in future growth.
Most Popular Narrative Narrative: 8.8% Undervalued
With Toll Brothers last closing at $138.94 against a narrative fair value of $152.40, the storyline leans toward upside potential driven by structural demand.
Demographic tailwinds from affluent Millennials and Gen Z entering peak homebuying years, combined with persistent housing shortages, are creating pent up demand for larger, luxury homes, a core Toll Brothers offering that supports sustained high average selling prices, revenue growth, and pricing power.
Curious how moderate growth assumptions, slightly slimmer margins, and a richer future earnings multiple can still justify a higher valuation than today? The full narrative reveals the trade offs behind that call.
Result: Fair Value of $152.40 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, a heavier tilt toward speculative builds and rising incentives could squeeze margins if luxury demand cools faster than analysts currently expect.
Find out about the key risks to this Toll Brothers narrative.
Build Your Own Toll Brothers Narrative
If your view differs or you prefer to dig into the numbers yourself, you can quickly craft a personalized Toll Brothers thesis in just a few minutes: Do it your way.
A great starting point for your Toll Brothers research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
Discover if Toll Brothers might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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