D.R. Horton Inc.
) reached a 52-week high of $27.39 on Monday, May 13, 2013
gaining momentum from solid second-quarter fiscal 2013 results
announced on Apr 26. Moreover, this Zacks Rank #1 (Strong Buy)
homebuilder has a bright outlook for the rest of the year with
the improving housing fundamentals. The closing price of the
shares on May 13 was $27.35, yielding a superb year-to-date
return of 34.1%.
Share Price Drivers
Estimates have been rising for D.R. Hortonafter it reported
strong second-quarter fiscal 2013 results beating the Zacks
Consensus Estimate for both revenues and earnings.
D.R. Horton's adjusted net earnings of 32 cents per share in
the second quarter of fiscal 2013 handsomely beat the Zacks
Consensus Estimate of 20 cents by 60% and the year-ago earnings
of 13 cents by 146.2%. The earnings upsurge was driven by both
sales and margin improvement in the homebuilding and financial
Homebuilding revenues climbed 48.7% year over year driven by
better pricing power and volume growth amid improved housing
market conditions. Homes sold, closed and in backlog, all
increased by greater than 30% in the quarter compared to the
year-ago quarter. Margins improved both sequentially and year
over year driven by better pricing power and reduced
In addition to this, management has a bright outlook for the
rest of the year and expects profitability to be driven by its
solid balance sheet and improved liquidity position allowing it
to re-invest in growth opportunities; increased pricing power;
and rising homes inventory and improving land position.
The robust quarterly results and a promising outlook for the
upcoming quarters led to an upward bias in estimate revisions. In
fact, the Zacks Consensus Estimate for 2013 and 2014 increased a
respective 18.2% and 16.7% to $1.17 and $1.68 per share over the
last 60 days. Moreover, D.R. Horton has beaten the Zacks
Consensus Estimate for the past four straight quarters.
Other Stocks to Consider
Other stocks in the homebuilding sector that are performing
well and deserve a mention include
Ryland Group Inc.
Meritage Homes Corporation
), both carrying a Zacks Rank #1 (Strong Buy) and
), carrying a Zacks Rank #2 (Buy).
D R HORTON INC (DHI): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
MERITAGE HOMES (MTH): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
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