D.R. Horton (DHI) Downgrade is Due to High Rates, Says Jim Cramer

We recently published 9 Stocks on Jim Cramer’s Radar.  D.R. Horton, Inc. (NYSE:DHI) is one of the stocks on Jim Cramer’s radar.

D.R. Horton, Inc. (NYSE:DHI) is one of the largest homebuilding companies in America. Its shares are up by 13.6% over the past year to make the firm one of the better-performing stocks in its sector. Cramer linked the firm to the broader homebuilding sector after Wells Fargo downgraded D.R. Horton, Inc. (NYSE:DHI) to Equal Weight from Overweight and cut the share price target to $155 from $180. The bank pointed out that it was witnessing inventory buildup and discounting in the industry. Citizens also downgraded D.R. Horton, Inc. (NYSE:DHI)’s stock in January. It cut the share rating to Market Perform from Market Outperform and remarked that the firm could see inventory clearing in 2026. Cramer tied the pessimism surrounding homebuilding stocks to interest rates:

The Top US City Where Home Prices Are Falling Most Now

“Alright David, you talked about what punches above its weight. And that’s housing, as well as Ford stock. Okay, this morning, jeez these research firms are taking aim at housing. Here’s a piece by Wells Fargo, actually a very informed piece, which downgrade Horton, the largest. And then, UBS downgrades Lennar, KBH, price target cut. This is a sign, again, rates are too high, rates are too high, and that’s because they were so low. . .it’s relative to where they were and you can’t buy starter homes. . . .these cannot get any traction, none. . .”

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.