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Today's Featured Article D.R. Horton Stock Tests Support Following Earnings ReportSubmitted by Chris Markoch. First Published: 1/21/2026. 
Quick Look- D.R. Horton reported better-than-expected earnings and revenue but showed year-over-year declines in profitability.
- Elevated mortgage rates continue to pressure affordability despite a structurally tight housing supply.
- Technical indicators suggest the stock may be forming a higher base near key support levels.
Shares of homebuilder D.R. Horton Inc. (NYSE: DHI) slipped about 1% in mid-day trading after the company reported first-quarter fiscal 2026 results. Headline results beat expectations: EPS of $2.03 on revenue of $6.89 billion versus consensus EPS of $1.98 on revenue of $6.66 billion. Still, the sell-off had some justification. On a year-over-year basis, revenue fell 9% and EPS dropped 22%, while net income declined 30%. Those declines weighed on investors on a day when the overall market was already under pressure. Some analysts are revisiting historical monetary resets and the role gold has played when governments faced large debt imbalances.
A new free report examines how gold was previously revalued to support national balance sheets, why recent comments from policymakers and investors have renewed interest in this topic, and what individuals may want to understand about protecting long-term savings during periods of monetary change. Download the free report here D.R. Horton maintained its full-year guidance. While that isn't an outright bullish sign, the company expects revenue and earnings to grow year over year in the back half of the fiscal year. In the short term, management said a 3% rise in net orders was largely driven by sales incentives. With DHI up roughly 8% in 2026 after a sharp December pullback, some investors may have been expecting more. Still, a higher floor in the share price could set up a buying opportunity for those willing to take on short-term risk. Will the Earnings Report Clarify Analyst SentimentHeading into the report, analysts held a mixed outlook on DHI. Bullish views included Goldman Sachs (NYSE: GS), which reiterated its Buy rating and $195 price target. On the other hand, some firms trimmed targets: UBS Group (NYSE: UBS) lowered its target slightly from $195 to $191, and Citigroup Inc. (NYSE: C) reduced its target to $154 from $163. There were also neutral views, such as from Wells Fargo & Co. (NYSE: WFC), which kept an Equal Weight rating but cut its price target to $155 from $180. Nothing in the report suggests analysts will rapidly change their outlooks for the company or the sector; persistent pressure on the housing market remains the overriding concern. The Relativity of Interest RatesThe Federal Reserve began cutting interest rates in late 2025, with the most recent cut in December. Many investors now expect the Fed to pause further cuts for several months, leaving financial conditions tighter than equity markets had hoped. Lower policy rates generally help equities by reducing borrowing costs, which is particularly important for small-cap companies that depend on debt to finance growth. But the dynamics are different for homebuilders. For builders like D.R. Horton, prospective buyers are often sensitive to mortgage rates. The company has acknowledged it still needs elevated incentives and rate buydowns to sustain sales volumes, even as orders and revenues remain resilient. That may sound at odds with the "tight supply" narrative, but it reflects an affordability gap: inventory remains constrained, yet demand is highly payment-sensitive at current mortgage rates. Incentives are being used to bridge that gap rather than simply to clear excess inventory. Remember that fixed mortgage rates track the 10-year Treasury more closely than the Fed funds rate; mortgages usually trade several percentage points above long-term Treasuries rather than at a fixed spread to the policy rate. While current rates are not extreme by long-term historical standards, they represent a shock for this generation of first-time buyers raised in an era of ultra-low 30-year mortgage rates. That amplifies the need for buydowns, discounts, and other incentives to make monthly payments manageable. Analysts emphasize that the housing market faces both supply and demand challenges. Structurally tight inventory supports pricing power for large builders like D.R. Horton, but stretched affordability means demand must be cultivated through incentives and the right product mix—not assumed simply because supply is limited. How to Approach DHI Stock After EarningsEven after the January rally, DHI remains roughly 15% below its summer highs following a strong run last year. The stock is hovering near its 50-day simple moving average (SMA), and a pattern of higher lows through late 2025 into early 2026 suggests it may be carving out a higher bottom. That constructive pattern only holds if the 50-day SMA acts as support. Momentum indicators, such as the MACD, have stabilized after a bearish crossover, hinting at a potential shift back toward neutral—or bullish—if the signal line turns up above zero. Recent lighter volume looks more like part of a broader rotation trade than capitulation by investors. 
Traders looking to act after the earnings release should watch whether the price holds the 50-day and can reclaim recent swing highs from late 2025. Aggressive traders might enter near the moving average with a tight stop just below the latest higher low, while conservative investors may prefer to wait for a decisive close above the current consolidation range as confirmation of renewed upside momentum.
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