Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
Tuesday, D.R. Horton (NYSE:DHI) shares are expected to see a positive reaction following the company's first-quarter operating earnings per share (EPS) surpassing JPMorgan's expectations and those of the broader market. JPMorgan analysts highlighted that D.R. Horton's reported operating EPS of $2.61 exceeded their estimate of $2.48 and the Street's anticipation of $2.45.
The outperformance was attributed to various factors, including higher homebuilding revenues, a lower tax rate, and higher gross margins, among others. According to InvestingPro data, D.R. Horton maintains a strong financial health score of GREAT (3.12/4.0) and trades at an attractive P/E ratio of 10.31.
The company's higher homebuilding revenues added $0.11 per share to the earnings, beating estimates. Additionally, a lower tax rate and higher gross margins of 22.7%, compared to the anticipated 22.5%, together with increased financial services income and favorable minority interest, collectively contributed to the earnings beat. These positive variances were partially offset by lower income from Forestar and rental properties, as well as slightly higher selling, general, and administrative expenses (SG&A).
Despite the earnings beat, D.R. Horton experienced a 1% decline in orders, which fell short of JPMorgan's projection for a 2% increase. Nevertheless, the company reaffirmed its fiscal year 2025 guidance for closings and consolidated revenue. In a notable move, D.R. Horton also raised its share repurchase forecast to between $2.6 billion and $2.8 billion, up from the previously stated $2.4 billion.
JPMorgan analyst Michael Rehaut reiterated an Underweight rating on D.R. Horton, maintaining the $156.00 price target. The firm's analysis suggests that the stock's performance today will likely be buoyed by the first-quarter results, which have surpassed investor expectations, particularly in terms of operating EPS and gross margins. The reiteration of the fiscal year 2025 targets by D.R. Horton, coupled with the increased share repurchase plan, further underpins the company's confidence in its financial strategy and outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.