Financial Performance & Expectations - D.R. Horton's Q1 FY26 net income was $594.8 million, resulting in earnings per diluted share of $2.03[88] - The company's consolidated pre-tax income for Q1 FY26 was $798.1 million, with a pre-tax profit margin of 11.6%[88] - D.R. Horton anticipates FY 2026 consolidated revenues to be in the range of $33.5 billion to $35.0 billion and expects to close between 86,000 and 88,000 homes[18] - The company expects to repurchase approximately $2.5 billion of common stock and pay out ~$500 million in dividends in fiscal year 2026[18,58] Market Position & Operations - D.R. Horton closed 17,818 homes in Q1 FY26, generating home sales revenues of $6.5 billion[88,89] - 63% of D.R. Horton's homebuyers are first-time homebuyers[8] - D.R. Horton's average sales price is $368.3K[8,28] - D.R. Horton's financial services segment had an 81% mortgage capture rate of D.R. Horton homebuyers[15,84] Land and Lot Strategy - D.R. Horton had 445,000 controlled lots (75%) and 145,500 owned lots (25%) as of December 31, 2025[78] - Forestar, in which D.R. Horton owns 62%, sold 14,240 lots and generated $1.7 billion of revenue in FY25[84,110]

Earnings Season Overview - The fourth quarter earnings season is gaining momentum, with major banks having reported results and upcoming reports from Charles Schwab and regional banks like Fifth Third [1] - Attention is expected to shift towards Netflix and Intel, which are headlining the earnings calendar [1] Earnings Growth Expectations - As of January 16, 7% of S&P 500 companies have reported fourth quarter results, with analysts estimating an 8.2% increase in earnings per share for the quarter, marking the 10th consecutive quarter of annual earnings growth for the index [2] - Analysts had initially expected an 8.3% jump in earnings per share, a decrease from the third quarter's 13.6% growth rate, but have since raised expectations, particularly for tech companies [3] Market Themes and Influences - The earnings season will test the improved stock market breadth observed at the start of 2026, with ongoing themes from 2025 such as artificial intelligence, tariff and economic policies from the Trump administration, and a K-shaped consumer economy continuing to influence market dynamics [4] Upcoming Earnings Reports - This week's earnings releases will include reports from United Airlines, 3M Company, D.R. Horton, Johnson & Johnson, GE Aerospace, Procter & Gamble, Abbott Laboratories, and Capital One, in addition to Netflix and Intel [5]

D.R. Horton recorded a lower first-quarter profit as affordability concerns continued to put off home buyers, hurting sales and forcing the company to offer big incentives. ...

Group 1 - 3M Co. is expected to report quarterly earnings of $1.80 per share on revenue of $6.01 billion, with shares slipping 0.2% to $167.45 in after-hours trading [1] - D.R. Horton Inc. is projected to post quarterly earnings of $1.93 per share on revenue of $6.60 billion, with shares falling 0.2% to $155.67 in after-hours trading [1] - BOK Financial Corp. reported better-than-expected earnings of $2.89 per share, exceeding the analyst consensus estimate of $2.18 per share, with quarterly sales of $589.563 million surpassing the estimate of $550.100 million; shares gained 0.4% to close at $128.21 [1] - United Airlines Holdings Inc. is projected to report quarterly earnings of $2.94 per share on revenue of $15.40 billion, with shares slipping 0.1% to $113.45 in after-hours trading [1] - Netflix Inc. is expected to post quarterly earnings of 55 cents per share on revenue of $11.97 billion, with shares rising 0.5% to $88.44 in after-hours trading [1]

Core Viewpoint - The focus of investors has shifted from D.R. Horton's quarterly performance to forward-looking issues such as changes in demand following a decline in mortgage rates and the potential impact of housing policy adjustments under the Trump administration [1] Group 1: Financial Performance Expectations - Analysts expect D.R. Horton's Q1 earnings per share to be $1.93, with revenue around $6.6 billion, a significant decline from $2.61 per share and $7.6 billion in the same period last year [1] - The company's gross margin is projected to drop from 22.7% in the previous year to 20.1% this quarter, indicating pressure on profitability due to the housing affordability crisis [2] Group 2: Demand and Market Signals - Early signs of improvement in housing demand are emerging, with an increase in mortgage applications reported by the Mortgage Bankers Association [3] - The interest from homebuyers has reportedly increased earlier than in previous years, coinciding with Trump's announcement to direct Fannie Mae and Freddie Mac to purchase mortgage-backed securities to lower rates [3] Group 3: Policy Uncertainty and Industry Impact - The Trump administration's housing policy changes introduce complexity to the industry outlook, with discussions around a "carrot and stick" approach that may reward or penalize builders based on compliance with government housing goals [4] - Analysts note that while lower mortgage rates could benefit builders by reducing repurchase costs, there is pressure to prioritize entry-level housing sales over profitability, which could negatively impact gross margins [4] Group 4: Future Guidance and Orders - Analysts forecast D.R. Horton's second-quarter profit margin to be 20.2%, with new orders expected to reach 24,240 units [5] - The company's management's guidance on orders and profit margins, along with interpretations of policy changes, will be critical for assessing the industry's direction [5]

Group 1 - The core viewpoint is that lower mortgage rates and potential housing policy changes may have a more significant impact on the housing market than the quarterly results of America's largest homebuilder [1] Group 2 - The upcoming report from the largest homebuilder is anticipated to reflect the influence of these external factors rather than just financial performance [1]

Economic Reports - The delayed November Personal Consumption Expenditures (PCE) report is expected on Thursday, skipping the October report due to a government shutdown, with the last September report showing +2.8% for both headline and core PCE [4] - The quarterly Gross Domestic Product (GDP) for Q3 2025 is also due on Thursday, with a first revision expected to align with the previously announced +4.3%, a significant improvement compared to the -0.6% reported in Q1 2025 [5] - Initial Jobless Claims are anticipated to rise above +200K, from +198K reported last week, indicating a "no hire, no fire" environment despite weaknesses in monthly job numbers [6] Q4 Earnings Reports - Q4 earnings season begins this week, with key reports from 3M and D.R. Horton before the market opens, and from Netflix, United Airlines, and Interactive Brokers Group after the market closes [7] - Interactive Brokers is rated as a buy (Zacks Rank 2), with expected growth of +2% on earnings and +4.3% on revenues [8] - Netflix, rated as a hold (Zacks Rank 3), is projected to achieve +27.9% growth in earnings and +16.8% in revenues as it expands globally [8] - D.R. Horton aims to exceed expectations of -25% earnings growth and -12% revenue decline [8]

Group 1: Market Overview - The trading week begins on Tuesday, January 19th, 2026, with the market closed on Monday for Martin Luther King, Jr. Day [1] - The delayed November Personal Consumption Expenditures (PCE) report is expected on Thursday, skipping the October report due to a government shutdown [4] - The quarterly Gross Domestic Product (GDP) for Q3 2025 is also due on Thursday, with expectations for a revision in line with the previously announced +4.3% growth [5] Group 2: Job Market Insights - Initial Jobless Claims are anticipated to rise above +200K, from +198K reported last week, indicating a stable jobless claims environment despite weak monthly job numbers [6] Group 3: Q4 Earnings Reports - Q4 earnings season begins with reports from 3M (MMM) and D.R. Horton (DHI) before the market opens, and from Netflix (NFLX), United Airlines (UAL), and Interactive Brokers Group (IBKR) after the market closes [7] - Interactive Brokers is expected to grow by +2% on its bottom line and +4.3% on the top, holding a buy rating [9] - Netflix aims for +27.9% growth in earnings and +16.8% in revenues, continuing its expansion into global markets, holding a hold rating [9] - D.R. Horton is expected to improve on a -25% earnings growth forecast with -12% revenues [9]

Core Viewpoint - Investor Steve Eisman suggests that President Trump's initiative to lower mortgage costs could lead to a short-term rally in U.S. homebuilder stocks, despite not addressing deeper market issues [1]. Group 1: Policy Impact - Trump's proposal includes purchasing $200 billion in mortgage-backed securities to reduce borrowing costs, which Eisman believes could trigger a rally in homebuilder stocks [2]. - The current mortgage rates have decreased to 6%, and if they drop to 5.5%, it is expected that both existing and new home sales will improve [3]. Group 2: Stock Performance - Two key homebuilder stocks, Lennar Corp. and D.R. Horton Inc., are highlighted as having potential for upward movement due to falling mortgage rates and their low valuations [3]. - D.R. Horton has a market capitalization of $45 billion, and Eisman anticipates that these stocks will rise more rapidly than expected [3]. Group 3: Market Context - The homebuilding sector had a challenging year in 2025, impacted by high rates, tariffs, and immigration policies, but is showing positive momentum at the start of 2026 [4]. - Year-to-date performance for Lennar Corp. is +13.79% and for D.R. Horton Inc. is +7.03%, indicating a recovery trend [5].

Group 1 - BofA raised the price target on D.R. Horton (DHI) to $162 from $158 while maintaining a Neutral rating on the shares [1] - Homebuilder stocks have rallied sharply year-to-date after underperforming the market in 2025 [1] - The firm anticipates that weaker employment and migration trends, ongoing inflation, and a competitive selling environment will pressure fundamentals through 2026, marking it as a "reset year for homebuilders" [1]