Toll Brothers (NYSE: TOL) has been volatile over the past year as housing affordability remains tight and new construction activity continues to reset from pandemic highs. Shares trade near $139/share, showing a modest recovery from earlier 2025 levels, although the broader backdrop for premium homebuilders remains challenging. Demand continues to shift as higher mortgage rates limit buyer activity, especially in discretionary upscale markets.
Recently, Toll Brothers posted results that came in stronger than expected, supported by solid pricing, stable backlogs and disciplined cost control. Management also highlighted resilient demand among higher income buyers and continued progress across its luxury communities. These updates show that Toll Brothers can still deliver consistent performance even as the housing market works through tighter affordability and softer overall momentum.
This article explores where Wall Street analysts believe the stock could trade by 2027. We have reviewed consensus price targets and TIKR’s valuation model to outline the stock’s potential path. These figures reflect current analyst expectations and not TIKR’s own forecasts.
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Analyst Price Targets Suggest Modest Upside
Toll Brothers trades at about $140/share today. The average analyst price target is $151/share, which points to roughly 8% upside and places the stock in the modest upside category.
Analyst forecasts are relatively tight and show a steady, balanced outlook:
- High estimate: $183/share
- Low estimate: $92/share
- Median target: $155/share
- Ratings: 9 Buys, 1 Outperform, 5 Holds, 1 Underperforms
It looks like analysts see some room for gains, but expectations remain controlled. For investors, most of the stock’s movement will likely track housing demand, mortgage rate shifts and the company’s ability to convert backlog efficiently. With modest upside priced in, the stock could outperform only if demand conditions strengthen more than expected.
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Toll Brothers: Growth Outlook and Valuation
The company’s fundamentals appear steady, but the model inputs point to a slower growth profile over the next few years:
- Revenue is projected to grow about 1.4%
- Operating margins are expected to hold near 16.5%
- Shares trade at roughly 8.3x forward earnings
- Based on analysts average estimates, TIKR’s Guided Valuation Model using an 8.3x forward P E suggests about $130/share by 2027
- This reflects a total return of about negative 7%, or roughly negative 4% annualized
These assumptions indicate that earnings are likely to normalize rather than expand. With slower expected growth and a cautious backdrop for homebuilders, the stock’s valuation signals stability rather than strong upside. For investors, Toll Brothers may offer dependable operations, but a meaningful move higher would likely require improving affordability or stronger order trends that beat consensus expectations.
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What’s Driving the Optimism?
Even with a tougher housing backdrop, Toll Brothers continues to benefit from resilience among higher income buyers. This customer base is less sensitive to rate fluctuations, which helps support steady orders, consistent pricing and solid margins. Recent performance also highlighted stable backlogs and disciplined cost management, reinforcing the company’s ability to perform well despite affordability challenges.
Another positive factor is the company’s focus on luxury communities in supply constrained markets. These areas benefit from long duration demand, demographic tailwinds and limited existing home inventory. For investors, these strengths suggest the company can maintain healthy profitability even if the broader housing market grows at a slower pace.
Bear Case: Valuation and Housing Risk
Despite these positives, the homebuilding cycle still faces significant pressure. Affordability remains strained, and higher financing costs may continue to limit buyer activity if rates stay elevated. A softer job market or economic slowdown could further weigh on discretionary higher priced home purchases.
Valuation also presents a challenge. Toll Brothers trades at a low forward P E because analysts expect earnings to cool after several strong years. Without a catalyst to reaccelerate demand or expand margins, the stock may continue to be discounted. For investors, the risk is that stable execution alone may not translate to stronger share price performance if broader housing conditions remain restrictive.
Outlook for 2027: What Could Toll Brothers Be Worth?
Based on analysts average estimates, TIKR’s Guided Valuation Model using an 8.3x forward P E suggests Toll Brothers could trade near $130/share by late 2027. From today’s price of about $140/share, this implies a total return of roughly negative 7%, or about negative 4% annualized.
This outlook reflects the expectation that earnings will likely normalize rather than accelerate. For investors, Toll Brothers remains a high quality builder, but the near term return profile appears limited unless the housing environment becomes more supportive. The company offers stability, yet meaningful upside depends on outperforming today’s conservative forecasts.
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