Toll Brothers (TOL) Stock Testing Support Ahead of Earnings – What To Expect

Toll Brothers stock (NYSE: TOL) is trading at $136.32, down 1.91% ahead of today’s earnings, due after the closing bell. Investors are closely watching the luxury homebuilder, with the stock testing the strength of the $135 support range ahead of the print.

Analysts anticipate an earnings per share (EPS) of $4.88 for the quarter, representing a 5.3% increase compared to the same quarter last year. Revenue is projected to come in at $3.32 billion, a slight decrease of 0.46% from the prior-year quarter.

Toll Brothers’ stock has seen shifting sentiment on Wall St leading in to earnings, with JPMorgan upgrading the stock to “overweight,” setting a price target of $161.00.

However, the company’s Q1 fiscal 2025 earnings report presented challenges. Toll Brothers reported an EPS of $1.75, falling short of analyst expectations of $2.04. Revenue also missed estimates, coming in at $1.86 billion versus the anticipated $1.91 billion. The company attributed the shortfall to impairments and a delay in the sale of a stabilized apartment property within a joint venture.

Despite these setbacks, home deliveries increased by 3% compared to the same period last year, indicating underlying strength in its core business.

Looking to that print for clues, and the market reacted negatively to the Q1 earnings miss, with the stock experiencing a nearly 6% decline in after-hours trading. This downturn reflected investor concerns over earnings performance, coupled with broader worries about mortgage rate volatility and housing affordability.

Toll Brothers’ technical indicators provide a mixed picture. The current stock price is above both the 50-day simple moving average (SMA) of $134.60 and the 200-day SMA of $119.40, generally indicating a bullish trend. However, the recent price decline suggests that the stock is currently testing support levels. 

Despite recent volatility, Toll Brothers has been actively expanding its presence in the luxury home market. The company has launched several new luxury home communities, including Quail Ridge in Ridgefield, Washington; ParkVue on the Platte in Littleton, Colorado; and Mariposa at EverRange in Jacksonville, Florida. These developments underscore Toll Brothers’ commitment to growth and its focus on catering to the high-end market segment.

Options market data suggests an anticipated move of approximately 5.4% in TOL’s share price following the earnings release. This implies a potential price range of $129.21 to $146.55 in the near term. Markets are primed for potential volatility as the street digests the earnings report and forward guidance.