Update shared on04 Oct 2025
Fair value Increased 1.35%Analysts have raised their average price target for D.R. Horton by just over $2. This reflects continued optimism on interest rates, increased sector valuations, and the company's recent earnings beat.
Analyst Commentary
Recent analyst reports on D.R. Horton highlight a mix of upbeat outlooks and ongoing caution. Valuation adjustments, industry trends, and the company's latest earnings performance have been central themes in these perspectives.
Bullish Takeaways
- Bullish analysts have increased their price targets in response to D.R. Horton's strong earnings beat, particularly surpassing expectations on earnings per share and gross margin compared to previous outlooks and consensus estimates.
- The stock and broader homebuilder sector experienced a rally following the company’s recent performance. This reflects renewed investor enthusiasm for homebuilding companies.
- Upward valuation adjustments across the sector signal that investors are increasingly optimistic about improved conditions for homebuilders due to supportive macroeconomic factors.
- Forward optimism on interest rates is being priced in. This suggests the market expects favorable financing conditions to persist or improve, potentially driving growth for D.R. Horton.
Bearish Takeaways
- Despite raising price targets, some analysts continue to maintain a neutral stance. This indicates persistent caution regarding the company's valuation and near-term prospects.
- The recent cut in interest rates by the Federal Reserve is not expected to meaningfully alter the near-term trajectory of the housing market, tempering expectations for a rapid industry turnaround.
- Incentives offered in the early part of the current quarter are in line with management’s previous expectations. This suggests limited further upside from extraordinary incentive-driven demand.
What's in the News
- D.R. Horton announced consolidated earnings guidance for the fourth quarter and full fiscal year 2025, expecting revenues between $9.1 billion and $9.6 billion for Q4 and $33.7 billion to $34.2 billion for the full year. Home sales gross margins are estimated at 21% to 21.5% (Key Developments).
- Between April 17, 2025 and June 30, 2025, D.R. Horton repurchased 8,265,453 shares, representing 2.68% of its outstanding shares, for a total of $1,024.99 million, completing its latest buyback tranche (Key Developments).
Valuation Changes
- Fair Value: Increased slightly from $162.60 to $164.80, reflecting a modest upward revision in estimated company worth.
- Discount Rate: Rose marginally from 8.56% to 8.58%, indicating a slightly higher required rate of return.
- Revenue Growth: Remained nearly unchanged, staying at 6.24%.
- Net Profit Margin: Remained stable at 11.44%.
- Future P/E: Increased moderately from 10.48x to 10.63x, indicating a higher expected valuation on future earnings.
Disclaimer
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