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logoArgusJuly 23, 2021

D.R. Horton, Inc.: Reiterating BUY rating and $110 target price

Consumer Cyclical
Current Price
Price Target
Earnings Estimate

D.R. Horton, based in Fort Worth, Texas is one of the largest homebuilders in the U.S., with homebuilding revenue of $19.6 billion on 65,388 closings for the fiscal year ended September 30, 2020. To be sure, DHI may be number one based on deliveries while Lennar, whose average selling price is $100,000 higher than DHI's may be tops on revenue. The company offers homes in 90 markets within 29 states, mostly under its flagship D.R. Horton brand (63% of closings), and entry-level Express Homes (32%), as well as its high-end Emerald Homes and recently introduced Freedom Homes. The Southeast was the biggest revenue contributor, with 30% of the total in FY20. About 90% of revenue is from single-family detached homes. The average home price was about $300,000 in FY20. The company's financial services segment also provides mortgage financing and title agency services. The company's fiscal year ends on September 30. The business is seasonal with the highest revenues and operating income generally delivered in the third (ending in June) and fourth (September) quarters than in the first (December) and second (March) quarters.

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Analyst Profile

Chris Graja, CFA

Senior Analyst: Retail
Chris covers the Consumer sector for Argus. He was the #1 Stock Picker in the Household Durables sector, winning the 2019 StarMine U.S. Analyst award from Refinitiv. He was the #1 Stock Picker in Food and Staples Retailing, winning back-to-back U.S. Analyst Awards in 2015 and 2016. He received a prestigious Volunteer of the Year award from the New York Society of Security Analysts in 2000. Prior to Argus, Chris spent 16 years at Bloomberg Financial Markets. He was the Director of Training and a Senior Researcher for Bloomberg’s research division before joining the new Bloomberg magazine as Technical Studies Editor in 1993. He rose to Executive Markets Editor of the publishing group. Chris co-authored the book “Investing in Small-Cap Stocks,” which was published in three U.S. editions, an audio book, and two Chinese editions. Chris earned an MBA from Rutgers University. He is a CFA charterholder.