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Investing.com - D.R. Horton (NYSE:DHI) maintained its Market Outperform rating from Citizens on Thursday, with the firm reiterating its $180.00 price target following the homebuilder’s fourth-quarter fiscal 2025 earnings report. The $43.7 billion market cap company is currently trading near its InvestingPro Fair Value, with a P/E ratio of 13.7.
The homebuilder reported diluted earnings per share of $3.04 for the quarter, falling short of both Citizens’ expectation of $3.29 and the consensus estimate of $3.27. The earnings miss primarily resulted from lower-than-anticipated home deliveries, with the company completing 23,368 homes versus its guidance range of 23,500-24,000. This aligns with InvestingPro data showing revenue declined 7.3% over the last twelve months.
The delivery shortfall contributed to a higher selling, general, and administrative (SG&A) expense ratio for the quarter, further impacting profitability. Citizens attributed the results to ongoing affordability challenges pressuring potential homebuyers in the current market environment.
Despite these headwinds, Citizens highlighted that D.R. Horton continues to generate a 14% return on equity in challenging conditions, noting the company has historically gained market share during similar periods. The firm maintained its price target based on 2x forward twelve-month book value. InvestingPro data shows D.R. Horton’s actual return on equity is even stronger at 16%, with a healthy current ratio of 6.53, indicating substantial liquid assets exceeding short-term obligations.
Citizens suggested that demand recovery would likely require multiple Federal Reserve rate cuts to stimulate activity, especially in the lower-end market segment where D.R. Horton concentrates its operations. Despite current challenges, the company maintains a 1.08% dividend yield and has raised its dividend for 12 consecutive years according to InvestingPro, which offers a comprehensive Pro Research Report with additional insights on D.R. Horton and 1,400+ other US equities.
In other recent news, D.R. Horton, the largest homebuilder in the United States, reported its fourth-quarter earnings for fiscal year 2025. The company experienced a mixed financial performance, with earnings per share (EPS) falling short of analysts’ expectations. The reported EPS was $3.04, whereas the forecast was $3.29, resulting in a negative surprise of 7.6%. Despite the earnings miss, D.R. Horton’s revenue exceeded expectations, coming in at $9.68 billion against a forecast of $9.42 billion. The revenue beat suggests strong sales performance, which is a positive sign amid the earnings shortfall. These developments reflect recent challenges and achievements faced by the company. Investors and analysts are likely to monitor future financial reports closely.
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