TOL First Look: Beat and Modest Raise, Something Not Often Heard in the Current Environment

Research evidence excerpt

TOL First Look: Beat and Modest Raise, Something Not Often Heard in the Current Environment

Homebuilders & Building Products

FLASH

FLASH: TOLL BROTHERS, INC. (TOL) May 19, 2026

TOL First Look: Beat and Modest Raise, Something Not Rating:

Often Heard in the Current Environment Outperform

Price:

TOL posted solid F2Q Income Statement metrics with $2.97 in adjusted EPS $124.14

coming in +13% above our estimate and +16% above the Consensus. Importantly, Price Target:

$184F2Q Adjusted Gross Margin of 26.2% exceeded our above guide (25.5%) estimate % Upside:

by nearly 50 bps, continuing management’s outperformance streak for a 14th 48.2%

consecutive quarter. Clearly, investor focus tomorrow will be on the driver of the

Source: FactSet, Wolfe Research

BTE F2Q GM as TOL’s 1Q beat was driven by operating efficiency, while 2Q GM Priced as of 05/19/26

was expected to be penalized from geographic mix shift away from the Pacific

region with a 2H rebound. Appreciating the F3Q Adjusted GM guide (25.25%)

implies downside versus the 25.8% Consensus and our 26.1% forecast, we will

look for clarity on whether TOL was able to pull forward F3Q Pacific deliveries into

F2Q. Nonetheless, strong F2Q GM performance allowed the company to push

its F26 GM guide marginally higher, a key takeaway from the release. On that Trevor Allinson, CFA tallinson@wolferesearch.com

front, full year guidance improved slightly for most major line items, which we (636) 338-1466

declare a victory in this challenging housing environment despite TOL’s recently View Trevor’s Research

announced acquisition of Buffington Homes in NW Arkansas likely a modest drag View TOL Model

View Comp Table

on profitability in 2H.

Paul Przybylski

pprzybylski@wolferesearch.com