D.R. Horton(US:DHI) Hua Er Jie Jian Wen·2026-01-20 00:13Core 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]