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The Toro Company: A Baby Bull Market Is Gaining…
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The Toro Company: A Baby Bull Market Is Gaining Traction
Written by Thomas Hughes on December 28, 2025
What You Need to Know
- Toro’s stock is trying to carve out a base after a tough stretch, with price action suggesting the selling pressure may be easing.
- The company is managing through near-term headwinds while pointing investors toward a firmer fiscal 2026 setup.
- Capital returns and large-holder positioning are part of the backdrop as the market looks for confirmation in upcoming updates.
The Toro Company’s (NYSE: TTC) weekly stock chart suggests its bear market is over, a baby bull market has formed, and it’s gaining traction. Not only is the market showing clear support at long-term lows, aligning with prior price action, but support appears to be strengthening; the indications are strong, and a breakout is imminent. The breakout is the critical factor, signalling market commitment and a trigger point for investors, likely to spur an influx of new capital.
The fundamentals are also critical factorsfor this industrial stock. A bullish-looking chart without a bullish story is nothing more than a bear market setting itself up for another run lower. In this case, while The Toro Company continues to face hurdles, it is navigating them well, widening margins, and is on track to resume growth in 2026.
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Market Gets AMPed on The Toro Company’s 2026 Outlook
The Toro Company did not have a great 2025, with revenue contracting due to weakness in its consumer segment, but strength in the Pro segment offset it and was compounded by cost-saving efforts. The company’s AMP strategy is paying off, resulting in a 220 basis-point improvement in adjusted gross margin and significant outperformance on the bottom line. Investments in growth and technology, as well as the impact of tariffs, cut into earnings; however, adjusted EPS was more than 450 basis points ahead of MarketBeat’s reported consensus, free cash flow hit a record, and cost savings are forecast to continue in the upcoming year.
Guidance is a driving force for this market and the capital return outlook. The company continues to expect a modest single-digit revenue gain in 2026 but has increased its earnings forecast from prior levels, giving a range whose midpoint exceeds the consensus target. The new guidance includes a 25% increase to the AMP savings target, expected to be realized by the end of fiscal year 2026 (FY2026), and an improved outlook for capital returns.
The Toro Company’s capital return is attractive for investors. The company’s dividend, which yields about 2% as of the end of 2025, is safe at 35% of the earnings forecast and reliable, with a 22-year history of annual distribution increases. The cash flow and balance sheet also allow for share buybacks, which reduced the count by an aggressive 4.4% in FY2025 and are expected to continue in FY2026.
The Toro Company’s balance sheet is in a strong, fortress-like position, allowing it to support ongoing operations and growth initiatives while returning capital in 2026.
Highlights from FY2025 include the impact of aggressive share reduction, ie, reduced equity, offset by a strong cash position and low leverage. The company’s long-term debt is stable, well-managed, and less than 0.65x equity, about 3x the cash, providing no red flags for investors.
Institutions Buy The Toro Company’s Deep Value in Q4 2025
Analyst activity in TTC stock is modest, with only eight covering it, and sentiment is pegged at Hold. However, the stock is trading well below the low end of its target range, suggesting a minimum 5% upside from the critical resistance level. The consensus, which has been steady over the trailing 12-month period, forecasts more than 15% upside, sufficient for a nearly 18-month high.
The value opportunity is also seen in the institutional activity. While back-half 2025 activity was subdued relative to the front half, they own nearly 90% of the stock, and the balance of activity is conspicuously bullish. The group netted more than $2 for each $1 sold in Q3 FY2025 and approximately $3 for each $1 sold in Q4 FY2025, providing solid support and a market tailwind. Assuming this trend continues in Q1 FY2026, TTC stock will likely move above the critical $81.50 resistance target before the subsequent earnings release, due in March.
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