D.R. Horton (DHI) 2026Q1 Earnings Preview: Downside Risk on Housing Market Pressures

Forward-Looking Analysis

Analysts project mixed sentiment for D.R. Horton’s 2026Q1 earnings, with a consensus “Hold” rating from 16 Wall Street analysts. The average 12-month price target of $161.62 implies a 3.59% upside from the current price of $156.02. Recent analyst actions highlight volatility: Goldman Sachs reiterated a “Buy” with a $195 target (22.27% upside), while Citigroup lowered its target to $154 (5.75% upside) and Wells Fargo downgraded to “Equal Weight.” Key risks include weaker employment trends, elevated housing inventory, and inflation, which analysts at BofA and Citizens Jmp cite as pressures for 2026. Despite a 7.7% year-over-year revenue decline in 2025Q4, D.R. Horton’s gross profit of $2.10 billion and $3.06 EPS (vs. $3.04 estimate) suggest operational resilience. However, near-term earnings cuts from Citizens Jmp and Wells Fargo signal caution.

Historical Performance Review

D.R. Horton reported 2025Q4 revenue of $9.68 billion, exceeding estimates, with net income of $916.80 million ($3.06 EPS) and gross profit of $2.10 billion. While revenue declined 3.2% year-over-year, the company maintained profitability amid a challenging housing market. Analysts noted softer demand and elevated incentives as drag factors for H2 2025.

Additional News

Recent analyst activity includes BofA raising DHI’s price target to $162 (from $158) with a “Neutral” rating, citing housing market reset risks. Conversely, Citizens Jmp cut 2026 EPS estimates to $11.18 (from $11.39) and Q1 2027 to $2.01 (from $2.20), while Wells Fargo downgraded to “Equal Weight.” Citigroup trimmed its target to $154, reflecting reduced conviction. Media coverage highlights a 9% share price pullback and debates over valuation amid macro risks. Institutional investors, including Virginia Retirement Systems, have added to positions, while others like Allspring Global cut stakes.

Summary & Outlook

D.R. Horton’s 2026Q1 outlook hinges on housing market dynamics. While the company’s $42.42 billion market cap and 10-year dividend growth provide stability, near-term risks—softer demand, elevated inventory, and inflation—loom large. Analysts project 10.74% earnings growth for 2026, but downgrades and price target cuts suggest caution. The raised Q4 2027 EPS forecast by Citizens Jmp offers a long-term bullish signal, but 2026 may remain a “reset year” for homebuilders. Investors should monitor housing data, rate policy, and D.R. Horton’s ability to navigate competitive pricing pressures. The stock’s 3.59% upside potential is tempered by bearish near-term fundamentals, warranting a neutral stance with a focus on macro catalysts.