Toll Brothers, Inc. (NYSE:TOL) shareholders are probably feeling a little disappointed, since its shares fell 3.7% to US$139 in the week after its latest quarterly results. Toll Brothers reported US$2.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.60 beat expectations, being 8.2% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the most recent consensus for Toll Brothers from 14 analysts is for revenues of US$11.1b in 2025. If met, it would imply a modest 5.0% increase on its revenue over the past 12 months. Statutory earnings per share are expected to reduce 4.3% to US$14.60 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$11.0b and earnings per share (EPS) of US$14.57 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$152, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Toll Brothers, with the most bullish analyst valuing it at US$181 and the most bearish at US$108 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Toll Brothers' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 9.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Toll Brothers is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$152, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Toll Brothers analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Toll Brothers that you need to take into consideration.

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