Citi Downgrades D.R. Horton (DHI) to Sell

September 15, 2008 7:52 AM EDT

Citi downgrades D.R. Horton (NYSE: DHI) from Hold to Sell. Price target $11.50.

Citi analyst says, "We are downgrading DHI to a Sell based primarily on valuation. At ~1.0x current adjusted tangible book value and ~1.2x unadjusted tangible book value, DHI's valuation reflects the assumption that the true economic value of DHI's inventory equals or exceeds the accounting value of the inventory. We think this equivalence is unwarranted given likely future impairment charges. We also note that the elimination of downpayment assistance programs (DAPs) should adversely affect DHI more than its peers in the near term given the company's above average usage of DAPs."

D.R. Horton, Inc. is a homebuilding company in the United States. The Company constructs and sells homes through its operating divisions in 27 states and 83 metropolitan markets of the United States, under the name of D.R. Horton, America’s Builder.

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