Gina Sanchez, Chantico Global’s chief executive officer, recommends that homebuilder shares be purchased now that US Federal Reserve rates have been lowered by 50 basis points.
Members of the FOMC announced last night that they would be reducing rates by another 50 basis points (bps) before the year 2024.
The rate cuts usually benefit housing stocks, as the mortgage rates are lowered. This makes buying a home more affordable.
The increased demand will then translate into higher prices, and ultimately a greater profit margin for homebuilders.
Gina Sanchez believes that DR Horton Inc. (NYSE:DHI) is a name worth investing in.
The stock of DR Horton could benefit from a Harris win
Sanchez believes in DR Horton because a recent poll suggests that Kamala Harri will be the winner of Donald Trump’s race to become President of the United States.
In an interview with CNBC on Thursday, Harris said that a Harris administration would likely be focused on affordable housing, which could benefit “DHI” and other companies like it.
Chantico Global’s boss remains positive despite the fact that the company lowered revenue expectations for the year at $36.1 billion, which was below the July estimates of analysts.
Analysts’ average price targets for DR Horton are $197. This is roughly the same price as the shares of the company currently trade.
DHI, however, pays out a dividend of 0.61%. This puts it in a good position for generating solid returns over the long term.
Home Depot stocks could benefit as well from the lower rates
Gina Sanchez believes that home improvement retailers will also benefit from a rate cut.
She said this as she spoke about her positive opinion of Home Depot Inc. (NYSE: HD), with CNBC, today.
Sanchez also recommends purchasing HD shares to enjoy a healthy dividend yield of 2.32%.
Sanchez, a home improvement retailer based in Atlanta, Georgia, recently announced that it had exceeded expectations for its most recent reported quarter.
D.A. Michael Baker, Davidson’s analyst, reiterated the “buy” recommendation on Home Depot with a potential upside of $395. The company is known for outperforming during an easing economy.
Baker recommended investing in HD because, at that time, he was convinced it would continue to grow its market share.
The post Chantico Global CEO Gina Sanchez suggests homebuilder stocks after Fed rate reduction may be updated as new information unfolds
