D.R. Horton (DHI) Is Up 18.2% After Dividend Hike, $1B Buyback, and Revenue Outlook Update

• D.R. Horton recently declared a quarterly cash dividend of US$0.40 per share, completed a US$1.00 billion share buyback, and reiterated its fiscal 2025 revenue guidance of US$33.7 billion to US$34.2 billion, following third-quarter earnings that showed year-over-year declines in sales and net income.
• This series of announcements highlights the company's focus on returning capital to shareholders even as it faces continued margin pressures and lower revenues compared to last year.
• We'll explore how D.R. Horton's substantial share repurchase program informs the company's investment narrative and long-term outlook.

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D.R. Horton Investment Narrative Recap

To own D.R. Horton stock, investors have to believe in the company’s ability to balance capital returns with consistent homebuilding performance, even as revenue and margin pressures persist. The July 22 news, including reaffirmed guidance, a substantial dividend, and a completed US$1 billion buyback, doesn’t materially alter the primary short-term catalyst of market share expansion or mitigate the near-term risk posed by declining home affordability and shrinking margins.

Among the recent announcements, the buyback completion stands out. By reducing the share count by nearly 3% in just over two months, D.R. Horton maintains a focus on enhancing per-share results, but this move does not directly address affordability constraints or margin compression, which remain at the center of the company’s near-term narrative.

However, while the company’s capital returns signal confidence, investors should also be alert to the risk that persistent affordability pressures could continue to weigh on sales and margins...

Read the full narrative on D.R. Horton (it's free!)

D.R. Horton's outlook anticipates $40.6 billion in revenue and $4.6 billion in earnings by 2028. This projection assumes a 4.8% annual revenue growth rate and an increase in earnings of $0.3 billion from the current $4.3 billion.

Uncover how D.R. Horton's forecasts yield a $144.50 fair value, a 6% downside to its current price.

Exploring Other Perspectives

Seven members of the Simply Wall St Community provided fair value estimates for D.R. Horton ranging from US$105 to US$381.69 per share. As home affordability remains a potential drag on housing demand, this wide spectrum of investor opinions highlights how future prospects are far from settled, consider exploring multiple viewpoints before making up your mind.

Explore 7 other fair value estimates on D.R. Horton - why the stock might be worth 32% less than the current price!

Build Your Own D.R. Horton Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your D.R. Horton research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free D.R. Horton research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate D.R. Horton's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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