TOL Should I Buy
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Toll Brothers Inc (TOL) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The stock is in a strong uptrend with bullish technical indicators, positive sentiment from analysts, and favorable market conditions for homebuilders due to a housing shortage. Despite some recent financial challenges, the company's long-term growth prospects and demand fundamentals remain strong.
The stock is in a bullish trend with MACD positively expanding, RSI indicating overbought conditions at 86.27, and moving averages showing strength (SMA_5 > SMA_20 > SMA_200). The stock is trading near resistance levels (R1: 162.477, R2: 167.893), but the trend remains upward.
Analysts have raised price targets recently, with Oppenheimer increasing the target to $177 and maintaining an Outperform rating.
Hedge funds are significantly increasing their positions, with a 289.76% increase in buying over the last quarter.
Positive news on new luxury communities and a reported U.S. housing shortage of 3-4 million homes, which benefits homebuilders like Toll Brothers.
Financial performance in 2025/Q4 showed a decline in net income (-6.04% YoY), EPS (-1.08% YoY), and gross margin (-3.56% YoY).
Some analysts have expressed concerns about weaker employment and migration trends, ongoing inflation, and a competitive selling environment for homebuilders.
In 2025/Q4, revenue increased by 2.70% YoY to $3.42B, but net income dropped by 6.04% YoY to $446.7M. EPS declined by 1.08% YoY to 4.58, and gross margin fell by 3.56% YoY to 25.48%. While revenue growth is positive, profitability metrics have weakened.
Analyst sentiment is mixed but leans positive. Recent upgrades include Oppenheimer raising the price target to $177 with an Outperform rating and Citizens initiating coverage with an Outperform rating and a $175 price target. However, some analysts have lowered price targets due to concerns about a softer housing market and competitive pressures.
