D.R. Horton: Strong Fed Upside Potential From 2026 Onwards (Upgrade)
Summarize this article with:
Juxtaposed Ideas15K FollowersFollow5ShareSavePlay(13min)Comment(1)SummaryD.R. Horton's vertically integrated model, aggressive sales incentives, and improved consumer affordability underpin the upgraded Buy rating, despite macro headwinds.Recent Fed rate cuts, higher net sales orders, and robust operational scale position DHI for continued profitable operations into FY2026.While profit margins have normalized nearer to pre-COVID levels, the company's valuation and consensus forward estimates offer an attractive risk/reward profile.This is significantly aided by the reasonable technical indicators after the recent correction and bounce off the established 5-year uptrend line.DHI trades at a FWD P/E of 13.63x with a 3-year PEG of 1.10x while offering a robust upside potential to a $194.20 price target. Andrzej Rostek/iStock via Getty Images I previously covered D.R. Horton, Inc. (DHI) in August 2025, discussing how the bulls defended the prior recovery, thanks to the moderating borrowing costs and the robust FQ3'25 performance. Even so, given the consumer affordabilityThis article was written byJuxtaposed Ideas15K FollowersFollowI am a full-time analyst interested in a wide range of stocks. With my unique insights and knowledge, I hope to provide other investors with a contrasting view of my portfolio, given my particular background.If you have any questions, feel free to reach out to me via a direct message on Seeking Alpha or leave a comment on one of my articles.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.