What Happened?
Shares of homebuilder D.R. Horton (NYSE: DHI) fell 4.4% in the morning session after Evercore ISI downgraded the stock to 'In Line' from 'Outperform' and cut its price target to $169 from $185. The downgrade occurred amid a backdrop of broader market concerns, as the housing market continued to face headwinds from affordability issues and economic uncertainty.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy D.R. Horton? Access our full analysis report here.
What Is The Market Telling Us
D.R. Horton’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 28 days ago when the stock dropped 3.9% as concerns about the health of the U.S. economy grew following a significant downward revision of job market data.
The Labor Department reported that employers added 911,000 fewer jobs from April 2024 through March than initially estimated. These "benchmark revisions" are issued annually to more accurately account for new and defunct businesses. The report detailed that the leisure and hospitality sector added 176,000 fewer jobs, professional and business services 158,000 fewer, and retailers 126,000 fewer. This weaker-than-expected data has fueled investor anxiety, as it suggests businesses may be becoming more reluctant to hire amid economic uncertainty. The numbers issued are preliminary, with final revisions scheduled for February 2026.
JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.
D.R. Horton is up 18.3% since the beginning of the year, but at $162.80 per share, it is still trading 16.3% below its 52-week high of $194.56 from October 2024. Investors who bought $1,000 worth of D.R. Horton’s shares 5 years ago would now be looking at an investment worth $2,149.
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