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

Toll Brothers, Inc. (NYSE:TOL) is included among the 10 Cash-Rich Stocks to Buy Now.

On December 12, JPMorgan lowered its price target on Toll Brothers, Inc. (NYSE:TOL) to $141 from $161 and kept an Overweight rating after the earnings report. In a research note, the analyst pointed to fiscal 2026 closings and gross margin guidance that came in below estimates. The firm trimmed its forecasts but maintained a relative buy view on the stock.

For fiscal Q4 2025, Toll Brothers exceeded expectations on quarterly orders. At the same time, full-year guidance for 2026 landed below what the market was looking for. The company reported 2,598 signed contracts for the three months through October, according to a statement released after Monday’s close. Analysts surveyed by Bloomberg had expected 2,475.

Toll Brothers, Inc. (NYSE:TOL) also said it expects to deliver between 10,300 and 10,700 homes in fiscal 2026. Bloomberg’s consensus estimate stood at 10,843.

CEO Doug Yearley said the results show the company’s luxury business remains differentiated, as it serves a more affluent buyer who feels less pressure from affordability challenges. More customers chose to trade up to a new home, even when that meant selling an existing property and giving up a lower mortgage rate. The decline in rates during the quarter, from nearly 7% to below 6.3%, helped support demand. Builders, including Toll, have leaned more on incentives such as mortgage rate buydowns to bring buyers off the sidelines.

Toll Brothers, Inc. (NYSE:TOL) builds, markets, and finances residential and commercial properties across the United States.

While we acknowledge the potential of TOL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 13 Highest Paying Monthly Dividend Stocks to Buy and 15 Dividend Stocks With Low Payout Ratios and Strong Upside

Disclosure: None.