Ahead of the Bell: D.R. Horton

Next year is likely to be worse for the housing market, said Donald R. Horton, chairman of the nation's largest homebuilder by deliveries, adding that the company is cutting prices.

Deutsche Bank Securities Inc. lowered it target price to $13 from $15 per share due to a drop in its 2009 earnings estimate to $1.26 from $1.49 per share, according to analyst Nishu Sood.

Analysts polled by Thomson Financial, on average, expect 2009 earnings of $1.26 per share.

Fort Worth, Texas-based D.R. Horton swung to a 2007 fourth-quarter loss of $50.1 million, or 16 cents per share, on revenue of $3.12 billion.

Wall Street expected a loss of 66 cents per share on sales of $2.9 billion, according to Thomson Financial.

JPMorgan Securities Inc. analyst Michael Rehaut kept his "neutral" rating on D.R. Horton, but now expects the company to report a loss of 85 cents per share in fiscal 2008.

Wall Street expects a loss of 28 cents per share, according to Thomson Financial.

"While we remain impressed with DHI's more aggressive approach to inventory reductions, cost-cutting initiatives, and strong cash flow generation, we believe this is fairly reflected in its valuation," Rehaut wrote in a research note.