D.R. Horton, Inc. (NYSE:DHI), a prominent $37.5 billion market cap player in the Household Durables industry, through its subsidiary DHI Mortgage Company, Ltd., has entered into a significant amendment to its existing repurchase facility, as per a recent 8-K filing with the U.S. Securities and Exchange Commission. According to InvestingPro analysis, the company maintains strong financial health with a robust current ratio of 6.94x. The amendment, effective as of Thursday, May 8, 2025, modifies the Fourth Amended and Restated Master Repurchase Agreement originally dated February 18, 2022.
The revised facility, now termed the Amended Repurchase Facility, has a Maximum Aggregate Commitment amount of $1.4 billion. It also features an accordion provision that could allow the commitment to increase to $2.0 billion, subject to additional commitments from the current or new buyers. The company operates with a moderate debt level, maintaining a conservative total debt to capital ratio of 0.15, according to InvestingPro data. Notably, the obligations under the Amended Repurchase Facility are not guaranteed by D.R. Horton or any of its subsidiaries that guarantee the company’s homebuilding, rental, or Forestar operations.
The facility’s term has been extended through May 6, 2026, unless earlier terminated by the buyers’ commitments in accordance with the facility’s terms, by governmental order, or by law.
The Amended Repurchase Facility is designed to provide liquidity to DHI Mortgage by facilitating the sale of eligible loans to buyers in exchange for funds. These transactions are governed by the terms and conditions set forth in the Amended Repurchase Facility and its related agreements.
This financial arrangement is significant for D.R. Horton, a leading home construction company, as it ensures continued access to capital for its mortgage lending subsidiary. The amendment was filed as Exhibit 10.1 with the 8-K and is incorporated by reference into the filing. Based on InvestingPro’s Fair Value analysis, D.R. Horton currently appears undervalued, with 12 additional exclusive ProTips and comprehensive financial metrics available to subscribers. The information provided is based on the press release statement and offers a factual account of D.R. Horton’s financial activities without any speculative or promotional content.
In other recent news, D.R. Horton reported its earnings for the second quarter of 2025, revealing a mixed performance. The company posted earnings per share (EPS) of $2.58, which fell short of the projected $2.67, but revenue surpassed expectations, reaching $8.36 billion compared to the anticipated $8.15 billion. Despite the EPS miss, D.R. Horton remains optimistic, providing positive guidance for the third quarter with expected revenues between $8.4 billion and $8.9 billion. Additionally, the company priced a $500 million public offering of senior notes due in 2030 with an interest rate of 4.850% per annum, aiming to use the proceeds for general corporate purposes.
Analyst activity around D.R. Horton has been notable, with RBC Capital Markets lowering its stock price target to $105 from $125, maintaining an Underperform rating due to a significant shortfall in fiscal second-quarter orders. RBC Capital cited concerns about future earnings, projecting a decrease of 10% and 21% for the fiscal years 2025 and 2026, respectively. Meanwhile, Citizens JMP also adjusted its price target for the company to $180, down from $210, while maintaining a Market Outperform rating. This revision followed D.R. Horton’s reported normalized diluted EPS of $2.28 for the fiscal second quarter, which missed estimates due to fewer-than-expected home deliveries and higher SG&A expenses.
The company’s strategic focus includes managing its home sales gross margin, which is expected to be between 21% and 21.5% for the third quarter. Analysts have expressed concerns about rising incentives, interest rate volatility, and macroeconomic conditions impacting the company’s growth. Despite these challenges, D.R. Horton continues to expand its geographic footprint, operating in 126 markets across 36 states.
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