Shares of D.R. Horton rose the most in more than five years as the homebuilder posted earnings that beat expectations even as the US housing market remains sluggish.
Horton shares surged as much as 14% after the company released results for the fiscal third quarter, the biggest intraday gain since April 2020. The builder's stock had slipped more than 6% this year through Monday's close.
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The company's profit, orders and home closings beat analyst estimates, sending the stock higher.
Homebuilders have been navigating a sluggish US housing market that has been battered by a tricky combination of high mortgage rates and elevated prices.
More listings have come to the market in recent months, but buyers have been cautious as job cuts and concerns about President Donald's Trump's tariff policies continue to drive anxiety about the strength of the US economy.
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Horton lowered the top end of its full-year guidance for closings to 85,500 from 87,000. The lower end remained at 85,000. With the housing market deteriorating it's likely investors were relieved that it wasn't worse.
The company acknowledged that recent sales were coming with higher incentives, which is expected to continue into the fourth quarter. Executives said that would likely pressure profit margins.
Bloomberg Intelligence analyst Drew Reading called the share move Tuesday a "nice relief rally." Builders have been dealing with "a wall of worry from increasing competitive pressure to the risk of falling home prices and still cautious consumers," he said.
