D.R. Horton, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

D.R. Horton, Inc. (NYSE:DHI) just released its quarterly report and things are looking bullish. D.R. Horton beat earnings, with revenues hitting US$7.6b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 10%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for D.R. Horton

Taking into account the latest results, D.R. Horton's 15 analysts currently expect revenues in 2025 to be US$36.7b, approximately in line with the last 12 months. Statutory earnings per share are expected to sink 11% to US$13.20 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$37.1b and earnings per share (EPS) of US$13.96 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$171, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on D.R. Horton, with the most bullish analyst valuing it at US$220 and the most bearish at US$125 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await D.R. Horton shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that D.R. Horton's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.07% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than D.R. Horton.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that D.R. Horton's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on D.R. Horton. Long-term earnings power is much more important than next year's profits. We have forecasts for D.R. Horton going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether D.R. Horton's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.