D.R. Horton (NYSE:DHI) Shares Gap Down After Earnings Miss

D.R. Horton, Inc. (NYSE:DHI)’s stock price gapped down before the market opened on Tuesday following a dissappointing earnings announcement. The stock had previously closed at $180.38, but opened at $153.19. D.R. Horton shares last traded at $156.20, with a volume of 1,921,070 shares trading hands.

The construction company reported $3.92 earnings per share (EPS) for the quarter, missing the consensus estimate of $4.20 by ($0.28). The firm had revenue of $10 billion for the quarter, compared to analysts’ expectations of $10.22 billion. D.R. Horton had a return on equity of 20.72% and a net margin of 13.36%. D.R. Horton’s revenue for the quarter was down 4.7% on a year-over-year basis. During the same period last year, the firm posted $4.45 earnings per share.

D.R. Horton Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, November 19th. Stockholders of record on Tuesday, November 12th will be issued a $0.40 dividend. The ex-dividend date is Tuesday, November 12th. This represents a $1.60 dividend on an annualized basis and a dividend yield of 0.95%. This is an increase from D.R. Horton’s previous quarterly dividend of $0.30. D.R. Horton’s dividend payout ratio is presently 8.17%.

D.R. Horton announced that its board has authorized a stock repurchase program on Thursday, July 18th that allows the company to buyback $4.00 billion in shares. This buyback authorization allows the construction company to reacquire up to 6.9% of its stock through open market purchases. Stock buyback programs are usually an indication that the company’s leadership believes its shares are undervalued.

Analyst Upgrades and Downgrades

Several equities analysts have commented on the stock. Evercore ISI dropped their price target on shares of D.R. Horton from $218.00 to $204.00 and set an “outperform” rating on the stock in a research note on Wednesday. Royal Bank of Canada cut their price target on shares of D.R. Horton from $154.00 to $145.00 and set an “underperform” rating on the stock in a research note on Wednesday. BTIG Research decreased their price objective on shares of D.R. Horton from $190.00 to $186.00 and set a “buy” rating for the company in a research note on Wednesday. Barclays lifted their target price on D.R. Horton from $168.00 to $200.00 and gave the stock an “overweight” rating in a research report on Friday, July 19th. Finally, Bank of America upped their target price on D.R. Horton from $196.00 to $215.00 and gave the company a “buy” rating in a research report on Thursday, September 19th. One equities research analyst has rated the stock with a sell rating, six have assigned a hold rating and ten have issued a buy rating to the company. Based on data from MarketBeat.com, D.R. Horton has an average rating of “Moderate Buy” and an average target price of $185.87.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of DHI. Vanguard Group Inc. grew its position in D.R. Horton by 7.6% in the 1st quarter. Vanguard Group Inc. now owns 34,856,397 shares of the construction company’s stock valued at $5,735,620,000 after buying an additional 2,474,262 shares during the last quarter. Assenagon Asset Management S.A. increased its stake in shares of D.R. Horton by 1,761.6% during the second quarter. Assenagon Asset Management S.A. now owns 1,043,909 shares of the construction company’s stock worth $147,118,000 after acquiring an additional 987,834 shares during the period. Principal Financial Group Inc. raised its holdings in D.R. Horton by 51.2% during the second quarter. Principal Financial Group Inc. now owns 1,657,028 shares of the construction company’s stock worth $233,525,000 after purchasing an additional 561,337 shares in the last quarter. Long Pond Capital LP lifted its position in D.R. Horton by 438.6% in the first quarter. Long Pond Capital LP now owns 659,761 shares of the construction company’s stock valued at $108,564,000 after purchasing an additional 537,276 shares during the period. Finally, National Bank of Canada FI boosted its holdings in D.R. Horton by 265.6% in the 1st quarter. National Bank of Canada FI now owns 488,376 shares of the construction company’s stock valued at $73,239,000 after purchasing an additional 354,789 shares in the last quarter. 90.63% of the stock is currently owned by hedge funds and other institutional investors.

D.R. Horton Price Performance

The company has a market cap of $55.75 billion, a price-to-earnings ratio of 11.52, a PEG ratio of 0.78 and a beta of 1.72. The company has a 50-day simple moving average of $187.29 and a 200-day simple moving average of $165.15. The company has a debt-to-equity ratio of 0.23, a quick ratio of 1.30 and a current ratio of 7.22.

About D.R. Horton

D.R. Horton, Inc operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 118 markets across 33 states under the names of D.R.