Last Update 26 May 26

TTC: Strong Q1 Execution And 2026 Guidance Will Support Further Upside

Analysts have nudged Toro's price target up by $5 to $105 as they refresh models around the latest Q1 results and strong guidance. Updated assumptions on discount rate and future P/E feed into a broadly unchanged fair value of about $110.50 per share.

Analyst Commentary

Analysts adjusting their models around the latest Q1 results and guidance see only a modest change to Toro's price target, which now sits at US$105, while fair value estimates remain close to US$110.50. That gap frames the current debate around how much of the story is already reflected in the stock.

Bullish Takeaways

Bullish analysts point to Q1 results and strong guidance as support for keeping fair value estimates clustered around US$110.50, which still sits above the refreshed price target.
The updated model and higher target suggest these analysts see execution tracking well enough to justify a slightly richer P/E than before, even if only by a small amount.
Guidance is viewed as credible enough that analysts are comfortable fine tuning discount rate and valuation inputs rather than making wholesale cuts to long term assumptions.
The decision to raise the target, even incrementally, indicates that Q1 and guidance outcomes did not challenge the broader investment case around earnings quality and growth potential.

Bearish Takeaways

Bearish analysts may focus on the Neutral stance, which indicates they see limited upside from current levels relative to fair value near US$110.50.
The modest US$5 move in the target hints at some caution, suggesting Q1 and guidance were solid but not strong enough to warrant a more aggressive reset in valuation multiples.
The gap between the refreshed price target and the fair value estimate implies uncertainty around how consistently Toro can deliver against guidance and sustain current P/E assumptions.
By keeping ratings unchanged alongside a small target increase, cautious analysts indicate that execution risks and broader market conditions still matter for how close the stock trades to fair value.

What's in the News

Shareholders approved amendments to Toro's Restated Certificate of Incorporation to limit officer liability under Delaware law and to change the par value of all capital stock from US$1.00 to US$0.01 per share at the 2026 Annual Meeting of Stockholders (company filing).
Toro raised earnings guidance for fiscal 2026, with management now expecting total company net sales growth in a range of 3% to 6.5%, compared with a prior range of 2% to 5% (company guidance).
From November 1, 2025 to January 30, 2026, Toro repurchased 739,862 shares (0.76%) for US$63.94 million under the buyback announced on December 11, 2024, which is now completed (company buyback update).
From November 1, 2025 to January 2, 2026, Toro repurchased 391,790 shares (0.4%) for US$30.94 million, completing the repurchase of 5,000,000 shares (4.97%) for US$390.42 million under the buyback announced on December 13, 2022 (company buyback update).

Valuation Changes

Fair Value: Model fair value remains unchanged at $110.50 per share, keeping the implied upside picture broadly consistent with prior work.
Discount Rate: The discount rate has risen slightly from 8.63% to 8.81%, which generally has a softening effect on theoretical valuation even if the absolute move is small.
Revenue Growth: The revenue growth assumption is effectively unchanged at about 3.67%, signaling no material shift in expectations for top line expansion.
Net Profit Margin: Net profit margin is essentially flat at about 10.42%, indicating that profitability expectations are holding steady in the model.
Future P/E: The future P/E has risen slightly from 24.39x to 24.52x, pointing to a marginally higher valuation multiple being applied to projected earnings.

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Key Takeaways

Strategic investment in automation, electrification, and productivity initiatives positions Toro for long-term premium growth, margin expansion, and improved profitability across core segments.
Stabilized professional and recovering residential demand, alongside focus on sustainability and operational streamlining, underpin robust future revenue and earnings potential.
Toro faces ongoing margin and earnings risks from weak residential demand, weather and macro volatility, cost pressures, rising competition, and limited international diversification.

Catalysts

About Toro

Designs, manufactures, markets, and sells professional turf maintenance equipment and services.What are the underlying business or industry changes driving this perspective?

Ongoing investments and recent product launches in smart, connected, and autonomous turf and irrigation solutions (e.g., GeoLink Mow Autonomous Fairway Mower, TurfRad moisture sensing) directly position Toro to benefit from increasing automation in landscaping and heightened focus on water conservation, supporting future premium product revenue growth and higher net margins.
Professional segment momentum, driven by record golf participation and sustained infrastructure investment cycles, is providing multi-year order visibility and stable demand for advanced turf, grounds, and underground construction products, setting up for rising revenues and sustained earnings growth as markets recover.
Acceleration of the AMP productivity program, with $75 million in run-rate cost savings and a longer-term target of $100 million+, is enhancing operating leverage and margins, while ongoing portfolio optimization and selective divestitures streamline core operations for improved future profitability.
Channel inventory normalization and right-sizing in the residential segment, combined with maintained market share at key retailers, position Toro for a recovery in residential revenue and segment margins approaching historic 8–10% levels once consumer sentiment improves.
Regulatory and customer shifts toward electrification and sustainability are catalyzing further adoption of Toro's battery-powered and electric equipment lines, leveraging R&D investments to capture market share and drive high-margin growth as emission standards tighten across the industry.

Toro Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Toro's revenue will grow by 3.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 7.3% today to 10.4% in 3 years time.
Analysts expect earnings to reach $528.4 million (and earnings per share of $5.56) by about May 2029, up from $331.2 million today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 24.7x on those 2029 earnings, down from 26.6x today. This future PE is lower than the current PE for the US Machinery industry at 26.9x.
Analysts expect the number of shares outstanding to decline by 1.78% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.81%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Persistently weak demand in the residential segment, driven by homeowner caution on big-ticket purchases, prolonged low consumer confidence, and dealer hesitancy to restock, creates an ongoing drag on residential revenues and erodes residential margins, as reflected in significant year-over-year declines and the Spartan impairment charge.
Heavy exposure to macroeconomic cycles and weather volatility, particularly with two consecutive years of low snowfall affecting both residential and BOSS business segments, increases unpredictability in revenue and inventory management, with potential negative impacts on future earnings if weather patterns or housing weakness persist.
Elevated input costs (materials, manufacturing) and ongoing tariffs (especially on steel and China-sourced products) threaten net margins; despite current productivity and pricing mitigation strategies, future margin improvement could stall or reverse if inflation or new tariffs escalate.
Rising competition and technological disruption in landscaping equipment (e.g., electrification, automation, smart connected products) requires continuous heavy R&D and capital investment; if competitors innovate more rapidly or Toro's adoption lags, it could result in long-term market share loss and muted earnings growth.
Continued geographic concentration in North America and limited progress on expanding international professional/municipal markets leaves Toro vulnerable to regional economic slowdowns, shifts in infrastructure investment cycles, or changing regulatory/emissions standards, risking revenue concentration and increased earnings volatility.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $110.5 for Toro based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $5.1 billion, earnings will come to $528.4 million, and it would be trading on a PE ratio of 24.7x, assuming you use a discount rate of 8.8%.
Given the current share price of $90.8, the analyst price target of $110.5 is 17.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Ongoing Investments Will Drive Automation And Water Conservation In Landscaping