Doug Yearley

Toll Brothers is well-positioned at the luxury end of the housing market. Its affluent buyers are less sensitive to interest rates, have equity from existing homes and stock market gains, and are still moving. The company maintains margins, incentives have been flat for a year, and it is not having to buy down mortgage rates. A structural housing shortage of 4-6 million homes and favorable demographics (older millennials moving up) support a cyclical recovery. While the market is currently tough, Toll Brothers' brand and niche position it strongly for the eventual upturn.