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With a market cap of $61.8 billion, D.R. Horton, Inc. (DHI) is a leading U.S. homebuilder in the residential construction industry. The Arlington, Texas-based company builds single-family and attached homes, along with offering mortgage financing and related services.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and D.R. Horton fits this criterion perfectly, exceeding the mark. D.R. Horton is renowned for being the largest U.S. homebuilder, operating in 118 markets across 33 states, and known for its broad range of homes under brands like D.R. Horton, Express Homes, and Freedom Homes.
However, the homebuilder has fallen 3.2% from its 52-week high of $193.63, achieved in August. Despite this recent pullback, shares of DHI gained a notable 31.9% over the past three months, dwarfing the broader S&P 500 Index's ($SPX) 2.5% increase during the same time frame.
In the longer term, DHI is up 23.4% on a YTD basis, compared to SPX's 15.2% gains. Also, DHI stock has surged 59.9% over the past 52 weeks, significantly outperforming the SPX's 23.3% returns over the same time frame.
DHI stock has been trading above both its 200-day and 50-day moving averages since November last year, with few fluctuations earlier this year, indicating a bullish price trend.
D.R. Horton has outperformed due to strong demand driven by the under-supply of homes in the U.S., coupled with its ability to navigate challenges like high mortgage rates by benefiting from the "lock-in" effect, which limited existing home inventory. Additionally, easing supply chain constraints and stabilizing construction material prices have bolstered its performance.
Moreover, the stock jumped 10.1% on Jul. 18 after the company reported better-than-expected Q3 earnings of $4.10 per share, bolstered by strong demand despite high mortgage rates. The stock was further boosted by the company's revised annual home sales forecast to 90,000 units - 90,500 units and the announcement of a $4 billion share buyback program.
To underscore DHI's outperformance, rival Lennar Corporation (LEN) has gained 51.9% over the past 52 weeks and 20.9% on a YTD basis, lagging behind DHI’s returns during both these periods.
Despite the stock's strong performance, analysts remain cautiously optimistic about its prospects. The stock has a consensus rating of "Moderate Buy" from the 19 analysts covering the stock, and the mean price target of $195.40 suggests a premium of only 4.2% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
