Seaport Global Securities Downgrades D.R. Horton (DHI) to Neutral
Seaport Global Securities analyst Kenneth Zener downgraded D.R. Horton (NYSE: DHI) from Buy to Neutral.
The analyst commented, "Dallas... we've had a problem". Our "Dallas" thesis reflects our rising concern that housing activity is poised to slow further, on a lower neutral job rate, that over-rides Builders efforts to trim supply, and stabilize margins, materially lowering the risk to return outlook we held before, implying a trading range from “value-trap” to “catching a falling knife”, in our opinion. Why? 1) We think weak job growth (ie. lower neutral job rate) under-mines our prior assumption demand was stabilizing, with 2) lower demand extending our prior margin stability outlook (offsetting builders de-stock actions), that 3) increases the probability of single-family starts bottoming below past cycles' trough of 909K (our prior view), with current starts at 929K (3-mth avg) still 16% above past recessionary levels of 783K, when stocks bottomed, suggesting 4) further multiple compression until starts approach trough levels, consistent with past cycles.”
For an analyst ratings summary and ratings history on D.R. Horton click here. For more ratings news on D.R. Horton click here.
Shares of D.R. Horton closed at $139.69 yesterday.