Toll Brothers (NYSE:TOL) shares were lifted to Outperform from Sector Perform by RBC Capital on Thursday, with analysts raising the price target to $77 from $55 per share.
They told investors in a research note that the firm is raising its FY'23E EPS expectations for the company to $10.90 from $8.73 and FY'24E to $10.25 from $6.61 due to demand improvement and margin resiliency.
TOL shares have jumped over 4% so far Thursday, trading above the $68 mark.
"We believe sentiment has been overly negative on a relative basis given TOL's high-end, West Coast, and build-to-order exposures, with recent trends providing evidence that it has experienced improvement similar to peers," the analysts wrote.
"We expect outsized order growth through 1Q'24 given easy comps, while we also view TOL's long land bank as providing a margin advantage."
In addition, the analysts stated that they now expect mid-teens ROTE through CY'24, making TOL's "relative valuation attractive."