D.R. Horton boosts its stock buybacks

D.R. Horton (DHI) is increasing its stock buyback as it tries to project confidence in its prospects after a tough year for housing companies.

The company said in an 8K filing on Sept. 15 that it is now expecting to buy at least $3.25 billion of their equity by the end of the 2026 fiscal year, a 30% increase from the $2.5 billion stated in their previous plan. Horton also authorized an additional $5 billion for repurchases with no expiration date. That authorization alone represents 13% of the company’s market cap.

The company is likely taking advantage of an opportune time to invest. Horton’s stock has declined 21% over the past 12 months, closing at $135 on Friday. How quickly the national builder chooses to buy back the $5 billion of stocks could be an indication that they think the stock price has bottomed out.

This decision represents a pivot in strategy from the third quarter. During July’s earnings call, the company’s CFO said that while they weren’t ruling out expanding buybacks, they didn’t have any reason to believe they’d have the needed cash.

“Our year-to-date spend on repurchases has been in excess of our cash flow year-to-date,” said CFO Bill Wheat during the earnings call.

The change in buyback quantity suggests something has changed in Horton’s finances since July. This could be reflected in revenue and profit gains in their upcoming earnings report.

But it’s also possible that this buyback is a move to appease investors who have been wary of the drop in value of their shares. The challenges that contributed to the 20% drop in profits – inflation, high mortgage rates and geopolitical unrest – have only worsened. The Fed increased rates last month and is expected to hold them at this elevated level.

The buyback didn’t increase share prices in September.

Horton isn’t alone. S&P 500 companies announced a record $665 billion in buybacks during early 2026, with full-year authorizations forecast to reach $1.55 trillion.

Horton’s fourth quarter earnings report on Oct. 25 will show whether the buyback is based on any improvement in the company’s fundamentals.