## D.R. Horton (DHI) Misses Earnings Expectations, Sales Slow Down: Here’s What Analysts Think
D.R. Horton, the largest homebuilder in the United States, reported disappointing fourth-quarter earnings and sales results on Tuesday, signaling a potential slowdown in the housing market. Despite a slight increase in net sales orders, the company’s revenue and earnings failed to meet analysts’ expectations.
Sales fell 5% year-over-year to $10.0 billion, missing the consensus of $10.2 billion. While net sales orders increased 1% to 19,035 homes, their value decreased 2% to $7.1 billion. Earnings per share (EPS) came in at $3.92, falling short of the consensus estimate of $4.17.
Looking ahead, D.R. Horton forecasts revenue of $36.0 billion to $37.5 billion for the fiscal year 2025, a figure significantly lower than the consensus expectation of $39.4 billion. The company anticipates closing 90,000 to 92,000 homes during the year. D.R. Horton projects fiscal year 2025 operating cash flow to exceed the levels achieved in fiscal 2024.
David Auld, Executive Chairman of D.R. Horton, attributed the company’s performance to uncertainty and volatility in mortgage rates. “While mortgage rates have decreased from their highs earlier this year, many potential homebuyers expect rates to be lower in 2025. We believe that rate volatility and uncertainty are causing some buyers to stay on the sidelines in the near term.”
Despite the mixed results, D.R. Horton shares gained 2% to trade at $170.60 on Wednesday. However, analysts adjusted their price targets following the earnings announcement, reflecting a range of opinions on the company’s future prospects.
Analyst Reactions:
*
UBS
analyst John Lovallo maintained a Buy rating on D.R. Horton but lowered the price target from $217 to $214.*
Evercore ISI Group
analyst Stephen Kim also maintained an Outperform rating but reduced the price target from $218 to $204.*
Wells Fargo
analyst Sam Reid kept an Overweight rating but lowered the price target from $220 to $190.*
RBC Capital
analyst Mike Dahl downgraded the stock to Underperform, reducing the price target from $154 to $145.*
Citigroup
analyst Anthony Pettinari maintained a Neutral rating while lowering the price target from $186 to $185.The mixed reactions from analysts suggest that the market remains uncertain about the future of the housing sector and D.R. Horton’s ability to navigate these challenges. Investors looking to invest in DHI stock should carefully consider these factors and the long-term outlook for the housing market before making any decisions.
