On Monday, Barclays increased its price target on shares of D.R. Horton (NYSE:DHI) to $186 from the previous $166, while retaining an Overweight rating on the stock. The adjustment reflects the firm's anticipation of enhanced earnings for the home construction company, due to a potential rise in orders and a reduction in incentives.
The new price target is based on a multiple of 2.3 times the calendar year-end 2024 book value estimate of $79.43, which remains unchanged. Previously, the valuation multiple stood at 2.1 times. Barclays' decision to raise the multiple is informed by the expectation of a stronger earnings outlook for D.R. Horton.
The firm's analysis suggests that D.R. Horton could experience an uptick in orders, which in turn, might bolster the company's earnings. Moreover, a projected decrease in sales incentives offered by the company is anticipated to contribute to the improved financial performance.
Barclays' maintained Overweight rating indicates a positive outlook on D.R. Horton's stock, suggesting that the analyst believes the stock could outperform the average return of the stocks covered by the firm over the next twelve to eighteen months.
D.R. Horton has not publicly responded to this new price target at the time of reporting. The company's stock performance will continue to be observed by investors and analysts alike, to see if it aligns with Barclays' expectations.
InvestingPro Insights
Barclays' enhanced price target for D.R. Horton (NYSE:DHI) aligns with the company's strong financial performance. According to InvestingPro data, D.R. Horton has a robust market cap of $52.84B and an attractive price-to-earnings (P/E) ratio of 11.33.
The company's revenue growth over the last twelve months as of Q1 2024 stands at 6.66%, with a gross profit margin of 24.85%, underlining its efficiency in generating earnings.
InvestingPro Tips highlight D.R. Horton's consistency in rewarding shareholders, having raised its dividend for 10 consecutive years. The company also benefits from a positive sentiment among analysts, with 9 analysts having revised their earnings upwards for the upcoming period. This optimism is further supported by the stock's high return over the last year, with a 63.44% one-year price total return as of the reported date.
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