Analyst Rafe Jadrosich of Bank of America Securities reiterated a Buy rating on DR Horton (DHI – Research Report), with a price target of $158.00.
Rafe Jadrosich has given his Buy rating for D.R. Horton stock due to a combination of factors including the company’s solid performance and promising market outlook. Despite the underwhelming F1Q24 earnings with a gross margin that missed the company’s guidance, Jadrosich recognizes the early signs of an improving housing market as D.R. Horton reported a 35% year-over-year increase in F1Q orders. The slight rise in the company’s delivery outlook, from 86k-89k to 87k-90k, and revenue guidance adjustment to $36bn-$37.3bn, signal a positive trend that supports the Buy rating.
Additionally, Jadrosich finds the valuation of D.R. Horton compelling, especially considering the decline in the price-to-book ratio since 2019, which does not fully reflect the company’s enhanced return profile and competitive positioning. While acknowledging the near-term margin pressures due to higher incentives and a one-time charge, Jadrosich anticipates margin improvement post-F2Q. Adjustments to the price objective, now set at $158, account for a slightly lower return-on-equity forecast but still underpin the belief that D.R. Horton’s stock represents a worthwhile investment opportunity.
In another report released today, Citi also maintained a Buy rating on the stock with a $166.00 price target.
See Insiders’ Hot Stocks on TipRanks >>
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
DR Horton (DHI) Company Description:
Founded in 1978, Texas-based D.R. Horton, Inc. is a homebuilding company that is engaged in the construction and sale of single-family homes through its diverse brand portfolio that includes D.R. Horton, Emerald Homes, Express Homes and Freedom Homes.
Read More on DHI:
