F3Q26 earnings beat, but softer demand drives lower deliveries outlook

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F3Q26 earnings beat, but softer demand drives lower deliveries outlook

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D.R. Horton, Inc.

F3Q26 earnings beat, but softer demand

drives lower deliveries outlook

Reiterate Rating: NEUTRAL | PO: 150.00 USD | Price: 143.52 USD

F3Q beats, but weak demand drives lower deliveries guide 21 July 2026

D.R. Horton (DHI) reported F3Q EPS of $3.20, above our/consensus estimates of Equity

$3.03/$2.98, driven primarily by stronger-than-expected homebuilding gross margins.

However, DHI lowered F2026 closing outlook as demand weakened through the quarter.

Key ChangesWe lower our F2026E/F2027E EPS by 1%/6% due to lower volume outlook. We reiterate

our Neutral rating and lower our PO to $150 (from $173), now based on 1.7x forward (US$) Previous Current

book value (from 1.9x) to reflect a lower ROE outlook. Price Obj. 173.00 150.00

2026E EPS 10.65 10.51

Demand softened through the quarter 2027E EPS 12.61 11.82

Orders were flat YoY and 5% below our forecast. Average community count up 2% QoQ 2028E EPS 14.27 13.41

and 9% YoY. Absorption pace declined 9% QoQ, in line with seasonality, though DHI said

demand weakened as F3Q progressed amid higher mortgage rates, elevated gasoline Rafe Jadrosich

prices, and geopolitical uncertainty. Order ASPs were flat QoQ and incentives are Research Analyst

BofAS

expected to remain elevated through F2026. DHI lowered F2026 closing outlook to +1 646 855 5815

83.8k–84.3k homes (vs. 86.0k–87.5k), implying ~1% YoY decline at the midpoint vs. prior rafe.jadrosich@bofa.com

guidance for +2% growth, with management citing weaker than expected demand. F4Q Victoria Piskarev Research Analyst

closings guidance implies a 2%-4% YoY decline and starts are expected to slow BofAS

sequentially to align inventory with demand.