The challenging backdrop in the housing market leaves Bank of America uncertain about Dr. Horton. Analyst Rafe Jadrosich downgraded the stock to neutral from buy. He also lowered his price target to $150 per share from $160. The new price target points to only about 5% upside potential for the stock as of Friday. According to Jadrosich, the high interest rate environment has led to modest housing demand. Additionally, rising input costs are forcing huge gross margins for the company, he added. “We believe DHI is prudent in adjusting to a more challenging backdrop (beginning to slow shares and increasing share buybacks), but we expect margin expansion,” Jadrosich wrote in a Monday note. Headwinds will persist in F2025. “Additionally, higher batch costs (approximately 26% to 27% of total goods costs) amid a challenging macro environment. On an annual basis, LOT costs increased 10%, the company said in its latest earnings call. Jadrosich added that Dr. Hortons is already trading at a higher level relative to other homebuilders with similar return on equity. Analysts said Dr Horton’s “valuation (IS) is unspectacular compared to its peers”. Over the past 12 months, the stock has grown just 1.7%. Overall analyst sentiment on the stock is mixed. Per LSEG, only nine analysts have Buy or Strong Buy ratings on the homebuilder, while the remaining 13 view it as a Hold or Underperform.
ABOUT US
Our news website delivers comprehensive coverage on US news, economy, politics, and world events, ensuring you stay informed on the latest developments. We provide timely and accurate news to keep you updated on the most important stories. Stay connected with us for in-depth analysis and breaking news from around the globe.
Contact us: contact@realtimeheadlines.com
© Real Times Headlines - 2024 | All Rights Reserved