Sterne Agee Initates Coverage of D.R Horton (DHI)
Sterne Agee reported on Thursday that it has initiated coverage of homebuilding company, D.R. Horton, Inc. (DHI).
The firm has began coverage of DHI with a “Buy” rating and $29 price target. This price target suggests a 16% increase from the stock’s current price of $24.24.
An analyst from the firm commented, “we believe the company is raising prices in all of its markets due to less competition from existing homes for sale. We estimate this pricing power should produce multiyear double-digit EPS growth. […] Our price target represents a 20x P/E multiple on our FY14E EPS of $1.46, which is at the high end of our FY14 P/E valuation range of 15x to 20x FY14E EPS. We believe DHI’s pricing power, multi-year land position, and growing demand warrant a top-end valuation.”
D.R. Horton shares were up 22 cents, or 0.92% during premarket trading Thursday. The stock has increased 55% in the past year.
The Bottom Line
Shares of D.R. Horton, Inc. (DHI) have a 2.50% yield, based on Wednesday’s closing price of $24.02.
D.R. Horton, Inc. (DHI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.
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