Shares of D.R. Horton (DHI) are down 10% after the U.S. homebuilder reported financial results that missed Wall Street targets across the board.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
The Texas-based company announced Fiscal fourth-quarter earnings per share of $3.92, which missed the consensus expectation of analysts that called for $4.17. Revenues in the quarter ended September 30 totaled $10 billion, which was slightly below Wall Street’s forecast of $10.2 billion.
Both profit and sales were down from a year earlier, when D.R. Horton posted EPS of $4.45 and revenue of $10.4 billion. Management blamed the poor showing on mortgage rates that remain historically high and are keeping many would be homebuyers on the sidelines.
Mortgage Rates Moving Lower
In a news release announcing the company’s financial results, D.R. Horton Executive Chairman David Auld said, “While mortgage rates have decreased from their highs earlier this year, many potential home buyers expect rates to be lower in 2025.” That expectation is causing many potential buyers to wait to make a purchase decision, added Auld.
In terms of forward guidance, D.R. Horton said that it now expects Fiscal 2025 revenue of $36 billion to $37.5 billion from home sales of 90,000 units to 92,000 units. That guidance fell short of Wall Street forecasts of $38.9 billion in Fiscal 2025 sales.
On a more positive note, D.R. Horton increased its quarterly dividend to $0.40 from $0.30, an increase of 33%. The company also bought back 3.4 million shares in its Fiscal fourth quarter. DHI stock has gained 8% so far in 2024.
Is DHI Stock a Buy?
D.R. Horton stock has a consensus Strong Buy rating among four Wall Street analysts. That rating is based on three Buy and one Hold recommendations made in the last three months. There are no Sell ratings on the stock. The average DHI price target of $200 implies 22.66% upside potential from current levels.
