UPDATE: Citigroup Reiterates Buy Rating, Raises PT on D.R. Horton

In a report published Wednesday, Citigroup reiterated its Buy rating on D.R. Horton (NYSE: DHI), and raised its price target from $19.00 to $25.00.Citigroup noted, “We estimate that DHI possesses ~$3.50 a share in midcycle earnings power and should not need to raise additional equity to fund working capital use associated with higher (normalized) revenues. The company exhibits greater operating leverage than peers ('99-'11 median: 19% vs. peer mean 17%), which positions it well to generate above average margins in a recovery. Similarly, the builder's lower homebuilding net debt/capital and laser-like focus on cost controls, versus peers, provides it with: (1) dry powder for when new home sales/prices return to the norm, and (2) more cushion if new housing activity slips.”D.R. Horton closed on Tuesday at $20.71.