D.R. Horton price target raised to $217 from $200 at UBS

UBS analyst John Lovallo raised the firm’s price target on D.R. Horton to $217 from $200 and keeps a Buy rating on the shares. D.R. Horton beat across most homebuilding metrics and provided an encouraging Q4 outlook for gross margin, the analyst tells investors in a research note. The firm expects buyback activity to accelerate meaningfully and model $3.6B of repurchases over the next five quarters. Homebuilder stocks are poised for a valuation re-rate given numerous factors including structurally higher margins and returns, significantly reduced financial leverage, a notable shift towards land-light business models, meaningful and consistent cash flow generation through a cycle and a greater focus on returning capital to shareholders, UBS says.