RBC Capital analysts raised their price target for Toll Brothers (NYSE:TOL) to $150 from $143, reiterating an Outperform rating on the stock following the company’s reported Q3 earnings. The updated outlook reflects a marginal 1% increase in fiscal 2025 earnings per share (EPS) estimates, now projected at $14.16. The revision is driven by stronger home deliveries and higher average selling prices (ASP), which more than offset pressures from weaker margins.

While management attributed a weaker first-quarter gross margin percentage to product mix, the analysts noted that investor skepticism could persist until the anticipated rebound in the second quarter materializes. Short-term demand trends have exceeded typical seasonal patterns, and the company has started to scale back some of the enhanced incentives implemented previously.

Despite broader caution regarding the interplay of demand and incentives, Toll Brothers continues to stand out for its strategic positioning and robust return profile. The revised price target signals confidence in the company's ability to navigate current challenges and deliver long-term value.