Citi downgraded D.R. Horton, Inc. DHI from Buy to Neutral and raised the price target from $25 to $26 as the company's shares approach analysts' fair value estimates.
Citi analyst Will Randow wrote, “DHI reported 1FQ15 (December quarter-end) pretax income of $221M including charges, which compares to consensus/our estimate of $191M, on revenue of $2.3B (consensus/our estimate $2.1B). Homebuilding gross margin of 19.8% was in line with consensus/our estimate. Net orders of 7,370 homes (+35% YoY) were particularly strong, and exceeded consensus (6,904) and our forecast (6,272).”
D.R. Horton's 2015 gross margin guidance met expectations last month, unlike a few of their competitors. As the trend of Express Homes continues, the company will have to adjust operations to remain the one of the industry's leaders.
D.R. Horton closed Monday at $24.38.
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