D.R. Horton Earnings: Order Growth Continues, but Incentives Are Integral to Maintain Sales Pace

D.R. Horton closed out its fiscal 2023 with good fourth-quarter (ended Sept. 30) results. While homebuilding revenue declined 6% year over year, total revenue increased 9% thanks to robust sales activity from D.R. Horton’s growing multifamily business. And while EPS of $4.45 declined 5% year over year, it topped the FactSet consensus estimate by 12%. After five consecutive quarters of new orders declining year over year, orders turned positive last quarter and a strong rebound continued during the fiscal fourth quarter. Furthermore, management’s fiscal 2024 outlook for home deliveries and consolidated revenue exceeded our previous projections. We’ve raised our fair value estimate approximately 2% to $124 per share primarily due to the time value of money as our forecast adjustments had a net neutral effect on valuation.