Research

DHI – Given management’s confidence in projects, market share, and monetization, bearish market expectations are unwarranted, and upside is likely

  • D.R. Horton, Inc. (DHI:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.3x Uniform P/E. At these levels, markets are pricing in bearish expectations for the firm, which may be unwarranted given management’s confidence in the progress of their projects, their ability to increase market share, and opportunities to monetize land
  • Specifically, management is confident in the progress of their projects under construction, the potential of their completed lease-up phase projects, and their ability to increase market share over the long term. In addition, they are confident in the opportunity to monetize land that would otherwise be sold off, and in their same-store absorption increases.