$DHI

D.R. Horton's average price target was reduced from $156.29 to $155.07 by 14 analysts, suggesting a 16% upside from the Oct. 5 close. The consensus rating remains 'Hold' among 24 analysts, with 6 Buys, 16 Holds, and 2 Sells.

Morgan Stanley initiated coverage of U.S. homebuilders with a cautious view, citing affordability and margin pressures. Toll Brothers (TOL) received an Overweight rating and $159 price target, while Lennar (LEN), NVR, KB Home (KBH), D.R. Horton (DHI), and PulteGroup (PHM) were rated Underweight or Equal Weight. The bank expects flat closings and prices by 2027, with margin deterioration and earnings estimates below consensus.

Morgan Stanley initiated coverage on D.R. Horton (NYSE:DHI) with an Equalweight rating and a $151.00 price target. The company, the largest U.S. homebuilder, trades at $136.65 with a market cap of $38.2 billion. Morgan Stanley highlights its scale and affordability focus but notes risks from rate-sensitive buyers. D.R. Horton authorized a $5 billion stock repurchase program. RBC Capital raised its price target to $125 but maintains an Underperform rating.

Rising Treasury yields, up to 5.2%, have pushed mortgage rates above 7%, hurting homebuilders. The iShares U.S. Home Construction ETF (ITB) fell 9.9% in a month, with D.R. Horton (DHI), PulteGroup (PHM), and Lennar (LEN) down 7%, 9.8%, and 8.1% respectively. High energy prices, U.S. debt, and tech spending are driving yields higher, with no immediate relief expected.

U.S. home sales fell 1.2% YoY to 3.98 million in August, the first sub-4 million reading this cycle. D.R. Horton (DHI) reported a 20% cancellation rate, while KB Home (KBH) saw deliveries drop 19% YoY. The Fed's rate hikes, pushing mortgage rates near 7%, are squeezing affordability. Both companies' stocks have declined significantly over the past year.

Lennar (NYSE: LEN) missed fiscal Q3 2026 earnings estimates, reporting adjusted EPS of $1.23 on revenue of $8.05 billion. Shares fell to a 52-week low near $76.07. Other homebuilders like D.R. Horton (NYSE: DHI) and PulteGroup (NYSE: PHM) also reported weak revenue growth and rising cancellation rates due to affordability pressures and high mortgage rates. Lennar's Q4 guidance was cautious, citing labor availability, resale competition, and market conditions as challenges.

U.S. 30-year fixed mortgage rates rose to 6.95% in the week ended Sept. 17, the highest since January 2025, increasing monthly payments on a $400,000 loan by $51. The Fed raised its target range to 3.75%-4.00%, but mortgage rates are more tied to Treasury yields. Housing-sensitive stocks like Rocket Companies and D.R. Horton fell. Builders are using incentives to maintain demand.

D.R. Horton (DHI) participated in a $15 million seed round for Scaffold, an AI construction coordination platform. The investment aligns with DHI's focus on operational efficiency and margin protection in residential construction. DHI has a $39.0 billion market cap and develops residential communities across multiple regions.

D.R. Horton's stock is under pressure due to rising mortgage rates and a guidance cut. The company reduced its full-year revenue forecast to $32.5B-$33B, citing margin pressure and weak demand. Analysts have lowered price targets, with KBW setting it at $167. The stock is down 10% over three months, and a bearish trade is suggested.

D.R. Horton's board authorized a $5.0 billion share repurchase program for its common stock, with no expiration. The company expects at least $3.25 billion in fiscal 2026 buybacks, indicating confidence in its financial position and capital return strategy.