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D.R. Horton Acquires Braselton Homes For $23M

Leading homebuilder D.R. Horton has acquired Braselton Homes, the largest homebuilder in Corpus Christi, Texas.

The assets acquired by D.R. Horton (DHI) include about 95 lots, 90 homes in inventory and 125 homes in sales order backlog. The company also acquired control of about 840 lots through purchase contracts. Braselton will operate as a separate division within D.R. Horton, the company said.

For the twelve months ended Sept. 30, 2020, Braselton closed 223 homes and generated revenue of $56.3 million.

Donald R. Horton, Chairman of DHI’s Board, said, “We are pleased to have Braselton Homes, their local management and employees join the D.R. Horton family. Their experienced, dedicated team and well-established building operations make Braselton a great addition as we continue to expand our footprint across Texas.”

On Oct. 16, BTIG analyst Carl Reichardt reiterated his Buy rating for D.R. Horton and raised his price target to $92 from $85. He also raised his price target for DHI’s peers Green Brick Partners to $21 from $18, on Maritage Homes to $135 from $117, and on Taylor Morrison to $32 from $28. The analyst stated that his monthly builder checks indicated that business has “remained robust” in September, with expectations of 20%-30% order growth being included in the current valuations of the builders group.

Reichardt also said that the move-up demand is improving in the sector, though he still prefers the “spec-focused low-end business models”. (See DHI stock analysis on TipRanks)

The Street is cautiously optimistic about D.R. Horton. A Moderate Buy consensus is based on 8 Buys, 6 Holds and no Sells. With shares advancing 44% year-to-date, the average analyst price target of $78.75 implies a modest upside potential of about 4% over the coming months.

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