As previously reported, BofA downgraded D.R. Horton (DHI) to Neutral from Buy with a price target of $150, down from $160. Housing demand has moderated with higher rates and input costs are rising, notes the analyst, who believes D.R. is “prudently adjusting to a more challenging backdrop” by slowing starts and increasing share repurchases. However, the firm expects margin headwinds to persist through FY25 and sees limited upside to valuation with shares already trading at premium to other builders with similar return on equity.
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