Jim Cramer Discusses D.R. Horton (DHI) In Context of Interest Rates

Core Viewpoint - D.R. Horton, Inc. (NYSE:DHI) has shown strong performance in the homebuilding sector, with significant revenue and profit growth, and is well-positioned to capitalize on market opportunities, particularly in the context of interest rates and housing policy discussions [2][3]. Financial Performance - D.R. Horton reported fiscal first-quarter earnings of $6.89 billion in revenue and $2.03 in profit-per-share, surpassing analyst estimates of $6.60 billion and $2.03 respectively [2]. - The company's shares have increased by 8.5% over the past year and by 9% year-to-date [2]. Analyst Ratings and Price Targets - Evercore ISI raised the share price target for D.R. Horton to $169 from $167 while maintaining an In Line rating [2]. - UBS increased the price target to $193 from $191 and retained a Buy rating, reflecting an increase in the valuation multiple [2]. Market Position and Strategy - D.R. Horton is the largest homebuilder in the U.S. by volume, focusing on entry-level and first-time buyer segments, which is crucial in a market facing affordability challenges [3]. - The company benefits from operational efficiency, strong cash flow generation, and a 'land-light' strategy that mitigates balance sheet risk [3]. Recent Developments - The company reported stronger-than-expected home closings and new orders, with gross margins exceeding prior guidance and a 2% year-over-year decline in construction costs [3]. - Management has raised share repurchase guidance, indicating confidence in future cash flows [3].