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DR Horton Inc (NYSE: DHI) is in the red today even though it reported strong results for the fiscal third quarter.
Pro reacts to the decline in share price
The price action is all the more interesting considering the homebuilder also raised its guidance for the full year. On CNBC’s “Halftime Report”, Ritholtz’ Josh Brown said today:
I don’t like when stocks go parabolic and then reverse and close the day negative. That’s really dangerous price action. I think you’ve got to be careful until it cools off.
DR Horton now forecasts its revenue to come in between $34.7 billion and $35.1 billion this year on sales of 82,800 to 83,300 homes.
For the year, the homebuilder stock is still up nearly 40%.
What may be behind today’s price action
A possible explanation for the unusual price action may be that the stock opened at a record high this morning that may have triggered profit taking. According to Josh Brown:
Maybe the shareholder base is now too heavily concentrated amongst momentum players and not as heavily concentrated amongst fundamentally driven shareholders.
DR Horton reported a 37% annualised growth in net sales orders to 22,879 in the second quarter and a 26% increase in value to $8.7 billion, as per the press release.
Wall Street currently has a consensus “overweight” rating on the construction company.
Notable figures in DR Horton Q3 earnings report
- Earned $1.34 billion versus the year-ago $1.65 billion
- Per-share earnings also declined from $4.67 to $3.90
- Sales went up 11% year-over-year to $9.73 billion
- Consensus was $2.83 a share on $8.27 billion revenue
Also on Thursday, existing home sales came in down 3.3% for June.
The post DR Horton had a strong Q3 but price action today has been ‘dangerous’ appeared first on Invezz.
