10 Undervalued Cyclical Stocks to Invest In

​2. D.R. Horton, Inc. (NYSE:DHI)

Forward P/E Ratio: 12.87

Number of Hedge Fund Holders: 61

​D.R. Horton, Inc. (NYSE:DHI) is one of the Undervalued Cyclical Stocks to Invest In. Wall Street is cautious on D.R. Horton, Inc. (NYSE:DHI). Recently, on January 9, Michael Dahl from RBC Capital reiterated a Sell rating on the stock and lowered the price target from $118 to $117. Earlier on January 7, Citizens downgraded the stock from Market Outperform to Market Perform, without disclosing any price targets.

​Analysts at RBC Capital noted that they kept an Underperform rating on the stock because of the cautious outlook for the housing sector in early 2026. The firm noted that the housing affordability challenges and R&R are expected to potentially reach an inflection point later in 2026, but the first half remains challenging. RBC added that the non-residential markets are also giving mixed signals due to increased risks from policy changes, rates, and tariffs. Therefore, the overall volatility of the sector remains high.

Similarly, Citizens also noted its skepticism regarding the 2026 earnings projections for the sector. The firm believes that the consensus estimates for D.R. Horton, Inc. (NYSE:DHI) are overly aggressive. Citizens expect a potential inventory clearance for D.R. Horton to materialize during the spring of 2026. However, the firm downgraded the stock due to the near-term challenges.

D.R. Horton, Inc. (NYSE:DHI) is a Texas-based homebuilding company that develops land, constructs, and sells single-family and multi-family homes.