A month has gone by since the last earnings report for D.R. Horton (DHI) . Shares have added about 5.7% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is D.R. Horton due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.D.R. Horton Q4 Earn ...

D.R. Horton (DHI) closed at $156.76 in the latest trading session, marking a +1.44% move from the prior day. The stock exceeded the S&P 500, which registered a gain of 0.69% for the day. On the other hand, the Dow registered a gain of 0.67%, and the technology-centric Nasdaq increased by 0.82%. Shares of the homebuilder witnessed a gain of 0.51% over the previous month, beating the performance of the Construction sector with its loss of 3.09%, and the S&P 500's loss of 0.31%.The investment community will be ...

Wood construction of porch in progress. Key Points The housing market is beginning a slow recovery, with improvement expected to strengthen in 2026. D.R. Horton, Lowe’s, and Whirlpool are positioned to benefit from this rebound through volume growth, capital returns, and institutional support. Analyst and institutional sentiment signal long-term upside potential for these undervalued stocks. Interested in D.R. Horton, Inc.? Here are five stocks we like better. The housing market is still in rough s ...

Core Insights - Homebuilder stocks experienced significant gains following comments from a Federal Reserve official suggesting a potential rate cut in December [2][8] - The likelihood of a rate cut has increased to approximately 70%, up from 39% the previous day, according to CME Group's FedWatch tool [3] - Major homebuilder stocks such as Builders FirstSource, D.R. Horton, and KB Home saw their shares rise by about 7% on Friday, with other related stocks also benefiting from the news [4][8] Impact on Homebuilders - A potential reduction in the Federal Reserve's benchmark interest rate could lead to lower mortgage rates, making homes more affordable and stimulating demand from homebuyers [5][7] - Despite the positive outlook, many homebuilder stocks remain in negative territory for 2025 due to a sluggish housing market and elevated mortgage rates [6] Market Reactions - The comments from Federal Reserve Bank of New York president John Williams have fueled optimism among traders, leading to a surge in homebuilder stock prices [2][4] - Stocks connected to real estate, including Zillow Group and Rocket Companies, also saw gains as a result of the increased expectations for a rate cut [4]

Market Overview - The U.S. stock market experienced a significant rebound on November 21, 2025, with major indexes closing higher, recovering from earlier losses driven by optimism regarding potential interest rate cuts by the Federal Reserve [1][4] - The Dow Jones Industrial Average (DJI) rose 1.4%, adding 650 points, while the S&P 500 (SPX) gained 1.4%, closing at 6,590 points, and the Nasdaq Composite (IXIC) increased by 1.5% [2] Federal Reserve Influence - New York Federal Reserve President John Williams indicated support for a potential interest rate cut "in the near term," which shifted market expectations significantly, raising the likelihood of a rate cut at the December meeting to 73.1% from 39.1% [4] Corporate Performance - Nvidia (NVDA) reported a 62% year-over-year revenue increase to $57 billion, but its shares fell 3.2% on Thursday and 1.7% on Friday due to concerns over AI valuations [5] - Walmart (WMT) saw its stock decline by approximately 2% on Friday after a strong performance on Thursday, where it had jumped 6.5% following better-than-expected third-quarter results [6] - Retailers like Gap (GPS) and Ross Stores (ROST) had positive performances, with Gap surging 9.5% and Ross jumping 8.5% due to strong earnings [7] Notable Stock Movements - Alphabet (GOOGL) increased by over 3%, while Meta Platforms (META) added 1%. In contrast, Microsoft (MSFT) shares fell approximately 1%, and Oracle (ORCL) slid more than 4% [8] Upcoming Earnings and Economic Data - Several companies, including BJ's Wholesale Club Holdings (BJ) and IES Holdings (IESC), reported earnings after the market closed, with BJ's EPS at $1.16 against a forecast of $1.10 [9][10] - The upcoming week will feature key economic data releases, including the Producer Price Index (PPI) and Retail Sales for September, which were delayed due to a government shutdown [12]

Financial Performance - Consolidated revenues decreased by 7% to $34.3 billion in fiscal 2025 compared to $36.8 billion in fiscal 2024[166] - Pre-tax income fell by 25% to $4.7 billion, with a pre-tax operating margin of 13.8% compared to 17.1% in the previous year[175] - Net sales orders decreased by 4% to 83,423 homes, with the value of net sales orders declining by 6% to $30.8 billion[175] - Home sales revenue fell to $31.4 billion (84,863 homes closed) in fiscal 2025, down from $33.9 billion (89,690 homes closed) in fiscal 2024, primarily due to a 5% decrease in closings volume and a 2% decrease in average selling price[190] - Pre-tax income decreased to $4.7 billion in fiscal 2025 from $6.3 billion in fiscal 2024, with contributions from homebuilding, rental, financial services, and Forestar businesses[246] Home Sales and Orders - Homes closed decreased by 5% to 84,863, with an average closing price of $370,400, down 2% from the prior year[175] - Home sales gross margin decreased to 21.5% from 23.5% due to increased sales incentives[168] - The average selling price of homes closed in fiscal 2025 was $370,400, a 2% decrease from $378,000 in fiscal 2024[190] - The cancellation rate for sales orders remained stable at 18% for fiscal 2025, consistent with the previous year[182] - Sales order backlog as of September 30, 2025, was 10,785 homes valued at $4.12 billion, representing an 11% decrease in homes and a 14% decrease in value compared to 2024[187] Regional Performance - Homebuilding revenues decreased by 3% in the Northwest region for fiscal 2025, generating pre-tax income of $395.7 million compared to $420.8 million in fiscal 2024[207] - Homebuilding revenues in the Southwest region decreased by 6% in fiscal 2025, with pre-tax income dropping to $517.1 million from $703.5 million in fiscal 2024[208] - The South Central region experienced a 10% decrease in homebuilding revenues, resulting in pre-tax income of $964.6 million, down from $1.3 billion in fiscal 2024[209] - Southeast region homebuilding revenues fell by 21% in fiscal 2025, with pre-tax income decreasing to $839.9 million from $1.4 billion in fiscal 2024[210] - The East region saw a slight increase of 1% in homebuilding revenues, generating pre-tax income of $834.0 million compared to $1.1 billion in fiscal 2024[212] - The North region reported a 15% increase in homebuilding revenues, with pre-tax income rising to $583.6 million from $498.4 million in fiscal 2024[213] Financial Services - Financial services revenues decreased by 5% to $841.2 million, with pre-tax income at $278.7 million compared to $311.2 million[179] - Total revenues from financial services decreased by 5% to $841.2 million in fiscal 2025 from $882.5 million in fiscal 2024[236] - Financial services pre-tax income decreased to $278.7 million in fiscal 2025 from $311.2 million in fiscal 2024, a decline of approximately 10%[236] - Other income from financial services operations fell by 12% to $88.9 million in fiscal 2025, down from $101.1 million in the prior year, primarily due to reduced interest income on loan origination volume[243] Inventory and Assets - Total homebuilding inventories as of September 30, 2025, amounted to $20.3 billion, compared to $20.0 billion in 2024[216] - Approximately 19,600 homes were unsold in inventory as of September 30, 2025, compared to 25,700 unsold homes in 2024[221] - The total remaining purchase price of lots controlled through land and lot purchase contracts was $26.0 billion as of September 30, 2025, up from $25.2 billion in 2024[219] - Forestar's inventory totaled $2.6 billion at September 30, 2025, an increase from $2.3 billion in 2024[232] Cash Flow and Financing - Cash provided by operating activities increased to $3.4 billion from $2.2 billion in fiscal 2024[167] - Net cash provided by operating activities was $3.4 billion, an increase from $2.2 billion in fiscal 2024, primarily driven by net income[285] - Net cash used in financing activities in fiscal 2025 was $4.8 billion, including $4.3 billion for share repurchases and $1.0 billion for repayment of homebuilding senior notes[289] - The company repurchased 30.7 million shares at a total cost of $4.3 billion during fiscal 2025, with $3.3 billion remaining under the stock repurchase authorization[263] Debt and Interest - Interest incurred increased 104% to $103.1 million in fiscal 2025 from $50.5 million in fiscal 2024, driven by a rise in the weighted average interest rate and a 33% increase in average debt[203] - The company had outstanding notes payable totaling $6.0 billion as of September 30, 2025, with $1.6 billion due within 12 months[252] - Forestar's ratio of debt to total capital increased to 31.2% at September 30, 2025, compared to 30.7% in the previous year[269] Tax and Legal Matters - The effective tax rate remained stable at 23.6% in fiscal 2025 compared to 23.5% in fiscal 2024, with income tax expenses of $1.1 billion and $1.5 billion, respectively[247] - The new law terminating the energy efficient home tax credit is expected to reduce tax benefits starting in fiscal 2026, with benefits of $39.5 million in fiscal 2025 compared to $70.4 million in 2024[249] - The company reported reserves for approximately 875 pending construction defect claims, with costs totaling $57.2 million for resolved claims during fiscal 2025[319] - The company has established reserves for legal claims, with approximately 98% related to construction defect matters as of September 30, 2025[318] Market Conditions and Future Outlook - The company plans to maintain elevated sales incentives to support demand based on market conditions and mortgage interest rates[168] - The company plans to maintain elevated incentive levels in fiscal 2026, depending on market conditions and mortgage interest rates[195] - The company is exposed to risks from adverse developments in capital markets, which could limit access to capital and impact liquidity[302] - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements, effective in fiscal 2026 and 2028[323][324]

Core Viewpoint - Berkshire Hathaway, led by Warren Buffett, has made significant changes to its stock portfolio in the third quarter, including a new investment in Alphabet and a reduction in its holdings of Apple [3][12]. Group 1: Portfolio Changes - Berkshire Hathaway initiated a position in Alphabet, purchasing approximately 17.8 million shares valued at about $4.34 billion, representing 1.62% of its total portfolio [7][10]. - The total market value of Berkshire's stock holdings reached $267 billion, with the top ten holdings accounting for 86.69% of the total portfolio [5][6]. - In the third quarter, Berkshire sold off about 41.8 million shares of Apple, reducing its stake by 14.92%, while still holding over 238 million shares valued at approximately $60.66 billion, making Apple its largest holding [12][14]. Group 2: Increased Holdings - Berkshire increased its stake in Chubb Limited (formerly known as ACE Limited) by approximately 4.3 million shares, raising its market value by $1.21 billion, with the holding percentage increasing from 3.04% to 3.31% [9][10]. - Additional increases were noted in Sirius XM, Domino's Pizza, and Lennar Corporation, reflecting a strategic focus on these companies [9]. Group 3: Reduced Holdings - The company further reduced its holdings in Bank of America by approximately 37.2 million shares, decreasing its stake from 11.12% to 10.96% [12][14]. - Berkshire completely exited its position in D.R. Horton, selling all 1.485 million shares, which is significant given the company's role as a barometer for the U.S. housing market [14][15].

Core Viewpoint - Berkshire Hathaway, led by Warren Buffett, has made significant changes to its investment portfolio in the third quarter, including a new position in Alphabet and a reduction in its holdings of Apple and other stocks [2][11]. Summary by Sections New Purchases - Berkshire initiated a new position in Alphabet, purchasing approximately 17.85 million shares, valued at about $4.34 billion, which represents 1.62% of its total portfolio and ranks as the tenth largest holding [6][9]. Increased Holdings - The company increased its stake in Chubb Limited (insurance) by about 4.3 million shares, raising its market value by $1.21 billion, with the holding percentage increasing from 3.04% to 3.31% [8]. Reduced Holdings - Berkshire sold approximately 41.79 million shares of Apple, a reduction of over 14.92%, leaving it with over 238.21 million shares valued at approximately $60.66 billion, making Apple still the largest holding [11][12]. - The company also reduced its holdings in Bank of America by about 37.22 million shares, decreasing its stake from 11.12% to 10.96% [14]. - Berkshire completely exited its position in D.R. Horton, selling all 1.4854 million shares, which is significant as the company is considered a barometer for the U.S. housing market [11][13]. Overall Portfolio Changes - As of the end of the third quarter, Berkshire held a total of 41 stocks in the U.S. market, with a total market value of $267 billion, an increase from $258 billion in the previous quarter. The top ten holdings accounted for 86.69% of the total portfolio [4][5].

Core Insights - D.R. Horton Inc (NYSE:DHI) has retraced to multiple support levels, including its 200-day moving average and year-to-date anchored volume-weighted average price (AVWAP) [2] - The stock is also near its year-to-date breakeven level and a 61.8% Fibonacci retracement from its 2025 lows to highs [2] Options Market Analysis - DHI is approaching the second largest put open interest (OI) level for the second month contract, indicating potential support [4] - Despite a slight unwinding of pessimism among options traders, puts still outnumber calls, with a 10-day put/call volume ratio of 1.13 at major exchanges [4] - The current options are reasonably priced, with a Schaeffer's Volatility Index (SVI) of 35%, ranking in the low 15th percentile of its annual range, suggesting low volatility expectations [5] Trading Recommendations - A recommended call option has a leverage ratio of 7.5, which will double with a 12.9% increase in the underlying equity [6]

Core Insights - D.R. Horton is leveraging an AI tool from Prophetic to address the housing shortage in the U.S. caused by chronic underbuilding since the Great Recession, resulting in a deficit of approximately 4 million homes and a price increase of over 50% from pre-pandemic levels [2][4]. Group 1: Company Initiatives - D.R. Horton is the largest homebuilder in the U.S. and is focusing on using artificial intelligence to enhance home construction and tackle the housing crisis [2]. - The company aims to expand homeownership opportunities for American families by utilizing insights from Prophetic's AI platform for land acquisition and development [4]. Group 2: Industry Challenges - The construction industry faces significant challenges, including high costs and the complex process of acquiring and developing buildable lots, which hampers the ability to respond to housing demand [3]. - Identifying, acquiring, and entitling suitable land for development is highlighted as one of the largest challenges in providing affordable housing [4]. Group 3: Technological Solutions - Prophetic has created an AI-native platform that analyzes land acquisition and development, capable of processing extensive zoning documents from various jurisdictions [5][6]. - The software is currently operational in 25 states and plans to expand to all 50 states by June [5].