Toll Brothers (TOL) is expected to face near-term volume challenges, but its long-term outlook remains intact, Wedbush Securities said in a Tuesday note.
The brokerage said its prior fiscal Q3 order growth estimate of 20% was too high relative to recent results from competitors, revising it to 5% in line with consensus. It now forecasts Q3 earnings of $3.59 per share and revenue of $2.9 billion, both in line with consensus.
The firm also cut its fiscal 2026 revenue forecast to $11.4 billion from $11.7 billion and its EPS estimate to $15 from $15.85, but disagreed with consensus expectations for a year-over-year revenue decline to $10.8 billion from $10.9 billion.
While modeling growth more conservatively given "stagnant" mortgage rates, Wedbush still expects year-over-year revenue gains for most builders it covers, including Toll Brothers.
The company is scheduled to release fiscal Q3 results after the market close on Aug. 19.
Wedbush reiterated an outperform rating on the stock and lowered its price target to $165 from $175.
Shares of Toll Brothers were up 2.4% in recent trading.
Price: 127.10, Change: +2.91, Percent Change: +2.35
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