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Investing.com - D.R. Horton (NYSE:DHI), a prominent player in the Household Durables industry with a market capitalization of $43.6 billion, maintained its Buy rating and $187.00 price target at UBS following the homebuilder’s fiscal third-quarter performance. According to InvestingPro analysis, the company maintains a GOOD financial health score, with liquid assets exceeding short-term obligations.
The homebuilder reported 23,160 home closings in the quarter, exceeding its guidance range of 22,000 to 22,500 units. D.R. Horton sold and closed a greater than expected 54% of homes within the quarter, partly due to improved construction cycle times.
Gross margin reached 21.8% in the fiscal third quarter, surpassing the company’s projected range of 21.0% to 21.5%. This outperformance occurred as incentives proved somewhat lower than originally anticipated.
D.R. Horton expects its fiscal fourth-quarter sales pace to decline quarter-over-quarter, but forecasts stronger than historical normal seasonality with a decline of 10% to 17%. The company plans to support this performance through greater incentive usage.
Current incentives represent a high single-digit percentage of average selling price, compared to a more normalized 2% to 3%, which UBS believes creates opportunity for margin expansion in 2026 if consumer confidence improves and interest rates stabilize or decline.
In other recent news, D.R. Horton reported impressive fiscal third-quarter 2025 results, with earnings per share (EPS) of $3.36, surpassing analyst forecasts of $2.90 and consensus estimates of $2.92. The company’s revenue also exceeded expectations, totaling $9.23 billion compared to the anticipated $8.8 billion. These results were driven by higher deliveries and improved margins in its core homebuilding operations, as well as better SG&A efficiency. Following these developments, several analyst firms adjusted their outlooks for D.R. Horton. Keefe, Bruyette & Woods raised their price target from $135 to $161, citing better-than-expected gross margins. RBC Capital increased their price target from $105 to $117, attributing the change to the strong third-quarter results and positive fourth-quarter guidance. Citizens JMP reiterated a Market Outperform rating and set a price target of $180, highlighting the earnings beat. These recent developments reflect positively on D.R. Horton’s financial performance and future prospects as viewed by analysts.
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