DHI
D.R. Horton, Inc.
$140.38
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 43.6% below fair value
You pay
$140.38
Bear
$193.48
Fair
$248.76
Bull
$304.04
Bear
$193.48
+37.8%
$13.82 × 14x
Fair
$248.76
+77.2%
$13.82 × 18x
Bull
$304.04
+116.6%
$13.82 × 22x
Adjust Assumptions
18.0x
13.82$
Key Value Driver
Through-cycle normalized EPS ($13.82)
Implied Market Multiple
10.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (53 analysts)
$160.00
Divergence from AlphaVal
55%
Summary
Using 7-year normalized EPS of $13.82 at a 18x cycle multiple, the base-case value is $248.76 per share. P/TBV cross-check: 1.6x.
Warnings
Wall Street's average price target is $160.00 (from 53 analysts). Our estimate is 55% above the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing