Toll Brothers (TOL) is benefiting from a resilient luxury buyer base that continues to support demand despite broader weakness in consumer sentiment and confidence, RBC Capital Markets said in a Friday note.

The firm said Toll Brothers' customers remain relatively insulated from macro headwinds, with 20% to 25% of buyers paying cash and the remainder carrying average loan-to-value ratios of about 70%. Demand is being driven more by low unemployment and strong equity markets, than by mortgage rate sensitivity, RBC said.

Toll Brothers continues to view access to well-located land as a key driver of growth, margins and returns, according to the note.

RBC said Toll Brothers' capital allocation strategy remains centered on investing for growth while returning capital through share repurchases, and that the company's recent acquisition of Buffington Home reflects its preference for niche, bolt-on deals with attractive growth and margin opportunities.

RBC Capital Markets maintained its outperform rating on Toll Brothers and $158 price target.

Price: 147.55, Change: +0.34, Percent Change: +0.23