JPMorgan Turns More Cautious on Toll Brothers’ (TOL) 2026 Growth Path

Core Viewpoint - Toll Brothers, Inc. (NYSE:TOL) is experiencing a cautious outlook from JPMorgan, which has lowered its price target while maintaining an Overweight rating due to below-estimate guidance for fiscal 2026 closings and gross margins [2]. Group 1: Financial Performance - For fiscal Q4 2025, Toll Brothers reported 2,598 signed contracts, exceeding Bloomberg's expectation of 2,475 [3]. - The company expects to deliver between 10,300 and 10,700 homes in fiscal 2026, which is below Bloomberg's consensus estimate of 10,843 [4]. Group 2: Market Dynamics - CEO Doug Yearley highlighted that the luxury segment remains strong, catering to affluent buyers less affected by affordability issues, with many customers opting to trade up to new homes despite higher costs [5]. - A decline in mortgage rates from nearly 7% to below 6.3% during the quarter has supported demand, prompting builders to offer incentives like mortgage rate buydowns to attract buyers [5].