Core Viewpoint - D.R. Horton Inc. (DHI) is expected to report its first-quarter fiscal 2026 results on January 20, with performance reflecting a balance between maintaining volumes and addressing affordability-driven demand constraints [1] Financial Performance - In the last quarter, DHI's earnings missed the Zacks Consensus Estimate by 7.6%, while total revenues exceeded the estimate by 2.4%. Both metrics showed declines of 22% and 3.2% year-over-year, respectively [2] - The Zacks Consensus Estimate for the upcoming quarter's earnings per share (EPS) has decreased to $1.96 from $1.97, indicating a 24.9% decline from the previous year's EPS of $2.61. The revenue consensus is set at $6.71 billion, reflecting an 11.9% year-over-year decline [3] Revenue Expectations - DHI anticipates total revenues for the quarter to be between $6.3 billion and $6.8 billion, down from $7.61 billion reported a year ago. The Homebuilding segment, which contributed 92% of total revenues in fiscal 2025, is expected to see a decline due to fewer homes closed, with an estimated 17,100 to 17,600 units compared to 19,059 units in the same quarter last year [5] - Homebuilding revenues are predicted to decline by 11.5% year-over-year to $6.34 billion, with home closures expected to be 17,483 units, down 8.3% year-over-year. Rental Property revenues are projected at $186.4 million, indicating a 14.4% decline from the previous year [6] Margin Analysis - DHI expects gross margins to be pressured by lower average selling prices (ASPs), elevated incentives, and higher lot costs. The home sales gross margin is anticipated to be between 20% and 20.5%, down from 22.7% in the prior year, with a predicted contraction of 260 basis points [9][13] - The company has noted that lot costs continue to be a structural headwind, with year-over-year increases expected to impact closings for several quarters. While construction cycle times have improved, the benefits to margins from efficiency gains are likely to be limited in the near term [11] Orders and Backlog - For the fiscal first quarter, net sales orders are predicted to increase by only 1% year-over-year to 18,012 units, with backlog units estimated at 11,314, indicating a 2.8% growth from a year ago. The value of the backlog is expected to be $4.35 billion, reflecting a 1.1% year-over-year increase [14] Earnings Prediction - The current model does not predict an earnings beat for D.R. Horton, with an Earnings ESP of -8.67% and a Zacks Rank of 4 (Sell), indicating lower odds of an earnings surprise [15]

Core Viewpoint - D.R. Horton, Inc. is expected to report a decline in earnings and revenue for the upcoming first quarter compared to the previous year, indicating potential challenges in the housing market [1]. Group 1: Earnings and Revenue Expectations - Analysts anticipate D.R. Horton will report quarterly earnings of $1.92 per share, a decrease from $2.61 per share in the same quarter last year [1]. - The consensus estimate for quarterly revenue is $6.65 billion, down from $7.61 billion a year earlier [1]. Group 2: Recent Performance - On October 28, D.R. Horton reported quarterly revenue of $9.7 billion, surpassing analyst estimates of $9.4 billion [2]. - Quarterly earnings were reported at $3.04 per share, which was below the consensus forecast of $3.28 per share [2]. - Following the earnings report, D.R. Horton shares increased by 1.1%, closing at $161.00 [2]. Group 3: Analyst Ratings and Price Targets - Citigroup analyst maintained a Neutral rating and reduced the price target from $163 to $154 [4]. - Citizens analyst downgraded the stock from Market Outperform to Market Perform [4]. - UBS analyst maintained a Buy rating but lowered the price target from $195 to $191 [4]. - Wells Fargo analyst downgraded the stock from Overweight to Equal-Weight and cut the price target from $180 to $155 [4]. - Barclays analyst maintained an Equal-Weight rating and increased the price target from $110 to $132 [4].

Core Viewpoint - D.R. Horton, Inc. is expected to report a decline in earnings and revenue for the upcoming first quarter, reflecting broader challenges in the housing market [1]. Group 1: Earnings and Revenue Expectations - D.R. Horton is projected to report earnings of $1.92 per share for the first quarter, a decrease from $2.61 per share in the same period last year [1]. - The consensus estimate for quarterly revenue is $6.65 billion, down from $7.61 billion a year earlier [1]. Group 2: Recent Performance - On October 28, D.R. Horton reported quarterly revenue of $9.7 billion, exceeding analyst estimates of $9.4 billion [2]. - Quarterly earnings were reported at $3.04 per share, which was below the consensus forecast of $3.28 per share [2]. - Following the earnings report, D.R. Horton shares increased by 1.1%, closing at $161.00 [2]. Group 3: Analyst Ratings and Price Targets - Citigroup analyst Anthony Pettinari maintained a Neutral rating and reduced the price target from $163 to $154 [4]. - Citizens analyst James McCanless downgraded the stock from Market Outperform to Market Perform [4]. - UBS analyst John Lovallo maintained a Buy rating but lowered the price target from $195 to $191 [4]. - Wells Fargo analyst Sam Reid downgraded the stock from Overweight to Equal-Weight and cut the price target from $180 to $155 [4]. - Barclays analyst Matthew Bouley maintained an Equal-Weight rating and raised the price target from $110 to $132 [4].

Core Viewpoint - D.R. Horton, Inc. is facing a significant decline in earnings per share and revenue for the upcoming quarter, indicating potential challenges in the homebuilding industry [2][6]. Financial Performance - The anticipated EPS for the quarter ending December 2025 is $1.96, reflecting a 24.9% decline year-over-year [2][6]. - Projected revenue is approximately $6.65 billion, representing an 11.9% year-over-year drop [2][6]. - Over the past 30 days, the consensus EPS estimate has been revised downward by 1.7%, indicating a reevaluation by analysts [2][3]. Market Valuation - DHI has a price-to-earnings (P/E) ratio of approximately 13.30, suggesting the market's valuation of its earnings [4]. - The price-to-sales ratio is about 1.37, indicating how much investors are willing to pay per dollar of sales [4]. - The enterprise value to sales ratio stands at around 1.46, reflecting the company's total valuation relative to its sales [4]. Financial Health - DHI's current ratio is 17.39, indicating strong liquidity and the ability to cover short-term liabilities [5][6]. - The debt-to-equity ratio is 0.25, showing a relatively low level of debt compared to equity [5][6]. - The earnings yield is 7.52%, providing a comprehensive view of DHI's financial standing [5].

Economic Outlook - ARK Invest CEO Cathie Wood predicts a "golden age" for U.S. equities, likening it to the boom of the 1980s, with the U.S. economy described as a "coiled spring" ready for a significant rebound [1] - Wood attributes the current economic tension to a "rolling recession" caused by aggressive Federal Reserve rate hikes, forecasting a surge in GDP growth and wealth creation due to converging factors like deregulation and tax cuts [2] Innovation and Growth - The current economic environment is characterized as "Reaganomics on steroids," with expectations of increased capital spending in sectors like artificial intelligence and robotics, benefiting the ARK Innovation ETF and the S&P 500 [3] - Real GDP growth is projected to accelerate to 6-8%, driven by a 4-6% increase in productivity, which will help suppress unit labor costs [4] Housing Market - The housing market is central to the "coiled spring" thesis, with existing home sales at levels not seen since the early 1980s, despite a larger population [5] - As interest rates stabilize and inventory becomes available, a sharp recovery in the housing market is anticipated, particularly for major homebuilders like Lennar Corp., KB Home, and D.R. Horton, which have reduced prices to clear inventory [6] Asset Allocation - Wood advises caution towards gold, viewing it as historically expensive relative to the M2 money supply, while advocating for Bitcoin as a superior asset due to its mathematical scarcity and programmed supply growth [7] - The ARK 21Shares Bitcoin ETF is positioned as a better diversification tool for the upcoming cycle of liquidity expansion [8] Market Performance - In 2026, the Nasdaq 100 index has increased by 1.35%, while the S&P 500 and Dow Jones indices have risen by 1.25% and 2.19%, respectively, indicating positive market performance [9]

​D.R. Horton, Inc. (NYSE:DHI) is one of the Undervalued Cyclical Stocks to Invest In. Wall Street is cautious on D.R. Horton, Inc. (NYSE:DHI). Recently, on January 9, Michael Dahl from RBC Capital reiterated a Sell rating on the stock and lowered the price target from $118 to $117. Earlier on January 7, Citizens downgraded the stock from Market Outperform to Market Perform, without disclosing any price targets. ​Analysts at RBC Capital noted that they kept an Underperform rating on the stock because of t ...

Core Viewpoint - D.R. Horton (DHI) is expected to report a significant decline in quarterly earnings and revenues, reflecting broader challenges in the housing market [1]. Earnings Estimates - The anticipated earnings per share (EPS) for D.R. Horton is $1.96, representing a decline of 24.9% year-over-year [1]. - Analysts have revised the consensus EPS estimate 1.7% lower over the past 30 days, indicating a reevaluation of expectations [1][2]. Revenue Projections - Total revenues are forecasted to be $6.71 billion, which is an 11.9% decrease compared to the previous year [1]. - Specific revenue segments are projected as follows: - Financial Services revenues are expected to reach $163.74 million, down 10.2% year-over-year [4]. - Home sales from Homebuilding are estimated at $6.28 billion, reflecting a 12.1% decline [4]. - Rental revenues are projected at $192.76 million, indicating an 11.5% decrease [4]. - Homebuilding revenues overall are expected to be $6.30 billion, down 12% from the prior year [5]. Geographic Revenue Insights - Geographic revenues for Homebuilding are estimated as follows: - East: $1.20 billion, down 8.9% [5]. - South Central: $1.35 billion, down 9% [6]. - North: $957.85 million, up 1.6% [6]. - Southwest: $948.60 million, down 16.8% [6]. Sales Metrics - Net sales orders for homes sold are projected at 18,607, an increase from 17,837 in the previous year [7]. - Homes closed are expected to total 17,323, down from 19,059 in the same quarter last year [7]. - The average selling price for homes closed is estimated at $362.57 million, down from $374.90 million in the same quarter last year [8]. - The sales order backlog is projected to be 12,005, compared to 11,003 in the same quarter last year [8]. Market Performance - Over the past month, D.R. Horton shares have increased by 3.7%, outperforming the Zacks S&P 500 composite, which rose by 2.1% [8]. - D.R. Horton holds a Zacks Rank of 4 (Sell), suggesting potential underperformance in the upcoming period [8].

Core Viewpoint - Bill Pulte criticized home builders' stock buybacks, leading to a decline in shares of D.R. Horton and Lennar [1] Company Impact - D.R. Horton and Lennar experienced a drop in their stock prices following Pulte's comments on buybacks [1]

Company Overview - D.R. Horton, Inc. (NYSE:DHI) is one of the largest homebuilding companies in America [2] - The company's shares have increased by 13.6% over the past year, making it one of the better-performing stocks in its sector [2] Recent Downgrades - Wells Fargo downgraded D.R. Horton from Overweight to Equal Weight and reduced the share price target from $180 to $155, citing inventory buildup and discounting in the industry [2] - Citizens also downgraded D.R. Horton in January, changing its rating from Market Outperform to Market Perform, indicating potential inventory clearing in 2026 [2] Market Conditions - The pessimism surrounding homebuilding stocks, including D.R. Horton, is linked to high interest rates, which are affecting the affordability of starter homes [3] - Research firms, including Wells Fargo and UBS, have recently downgraded multiple homebuilding stocks, indicating a broader concern in the housing market [3]

Defense Sector - The defense sector experienced significant volatility following President Trump's announcement of a proposed military budget increase to $1.5 trillion for fiscal 2027, a 50% increase from the $962 billion requested for 2026, leading to a surge in defense stocks [3][4] - Lockheed Martin's shares rose 4.3% on January 8, followed by a 4.2% increase on January 9, closing at $542.78, while Northrop Grumman and RTX also saw gains [3] - Smaller companies like Kratos Defense experienced a remarkable 13.8% increase, and defense-focused ETFs outperformed the broader market [3] Housing Market - President Trump's proposal to ban large institutional investors from purchasing single-family homes caused a decline in major stock indices, with the Dow Jones Industrial Average dropping 0.9% and the S&P 500 slipping 0.3% [5] - Shortly after, Trump announced a directive for federal agencies to purchase $200 billion in mortgage bonds to lower mortgage rates, which led to a rally in housing stocks, with Rocket Companies surging 9.65% and homebuilders like Lennar and D.R. Horton also experiencing significant gains [6][8] - Analysts expressed concerns that while bond purchases might lower mortgage yields, they could also increase housing demand, complicating the affordability issue [7] Energy Sector - The capture of Venezuelan President Nicolás Maduro and Trump's announcement of a $100 billion oil investment plan for Venezuela positively impacted major stock indexes, with energy stocks like Chevron and Exxon Mobil seeing gains [10] - However, by January 7, oil prices fell due to concerns over the long-term implications of Trump's plan to refine and sell Venezuelan crude, indicating a mixed market reaction [11] Tariffs and Legal Uncertainty - The market showed anxiety ahead of a Supreme Court ruling on Trump's tariffs, with Wall Street futures dipping as uncertainty persisted regarding the legality of these policies [13] - Kevin Hassett's expectation that the Supreme Court would side with the Trump administration on tariffs adds another layer of speculation to the ongoing legal battle, highlighting the tension between executive power and trade norms [14] Market Dynamics - The overall market remains highly reactive to Trump's pronouncements, with significant fluctuations observed across various sectors, including defense, housing, and energy, reflecting the interplay between presidential policy and economic fundamentals [15][16] - On January 9, major indices were on track for weekly gains, with the S&P 500 reaching a new all-time high of 6,966, indicating a volatile yet upward trend in the market [16]