D.R. Horton, Inc. (NYSE:DHI) surpassed third‑quarter revenue and earnings per share expectations, refined its 2025 guidance and projected continued growth, yet saw its shares dip.
Bank Of America Securities analyst Rafe Jadrosich reiterated the Neutral rating on D.R. Horton, Inc. (NYSE:DHI), raising the price forecast from $135 to $155.
D.R. Horton reported fiscal third-quarter revenue of $9.22 billion, beating analyst estimates of $8.79 billion, according to Benzinga Pro. The U.S. homebuilder reported third-quarter earnings of $3.36 per share, beating analyst estimates of $2.92 per share.
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Jadrosich says that stronger home deliveries and improved margins helped D.R. Horton outperform his forecast, and the company's revenue and gross‐margin outlook also exceeded expectations. Contrary to investors' anticipation of downward estimate revisions, D.R. Horton is on track to grow earnings in fiscal 2026 despite a tough housing market, he adds.
D.R. Horton’s stronger performance stemmed from its heavy presence in smaller markets with fewer public spec builders and a 12% year‑over‑year rise in community count. Jadrosich notes the company tightened its 2025 revenue guidance to $33.7 billion–$34.2 billion and home closing forecast to 85,000–85,500 units, and expects fiscal 2026 revenue growth fueled by mid‑single‑digit community expansion and a 24% quarterly, 11% annual jump in starts.
He also points out that core fourth-quarter gross margin held at 21.8%, above the 21.0%–21.5% outlook, despite higher incentives, and that D.R. Horton will continue to adjust its inventory and sales incentives by market while improved cycle times speed up turnover and align starts with sales.
Maintaining a Neutral rating, the analyst highlights that D.R. Horton trades at about 1.8× forward price‑to‑book with a 15% ROE for fiscal year 2026, versus the peer average (ex‑NVR) of 1.6× and 17% ROE.
Jadrosich raises his EPS estimates for fiscal year 2025 and fiscal year 2026 by 8% and 1%, respectively.
Price Action: DHI shares are trading lower by 2.78% to $149.18 at last check on Wednesday.
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