In the latest trading session, D.R. Horton (DHI) closed at $99.43, marking a +0.71% move from the previous day. This move outpaced the S&P 500’s daily gain of 0.28%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.14%.
Heading into today, shares of the homebuilder had lost 5.74% over the past month, lagging the Construction sector’s loss of 4.45% and the S&P 500’s gain of 0.12% in that time.
Wall Street will be looking for positivity from D.R. Horton as it approaches its next earnings report date. This is expected to be February 2, 2022. The company is expected to report EPS of $2.80, up 30.84% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.73 billion, up 13.37% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.57 per share and revenue of $33.76 billion. These totals would mark changes of +27.7% and +21.55%, respectively, from last year.
Any recent changes to analyst estimates for D.R. Horton should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. D.R. Horton is holding a Zacks Rank of #2 (Buy) right now.
Digging into valuation, D.R. Horton currently has a Forward P/E ratio of 6.78. For comparison, its industry has an average Forward P/E of 5.7, which means D.R. Horton is trading at a premium to the group.
Also, we should mention that DHI has a PEG ratio of 0.67. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Building Products – Home Builders was holding an average PEG ratio of 0.26 at yesterday’s closing price.
The Building Products – Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 55, which puts it in the top 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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