D.R. Horton (DHI) faces hurdles from increasing inventory and tariffs, leaving Wall Street earnings estimates for fiscal H2 "too high," Oppenheimer said Tuesday in a report

"It's also possible the company reduces or removes its FY25 closings guidance given the current demand backdrop," even as per-share earnings in Q2 mirror estimates, the report said

Oppenheimer's H2 earnings projection is 17% below the consensus and includes tariff-related cost pressures and volume softness.

"Input costs will likely increase for all builders at uncertain levels" because of tariffs, and "pricing power seems unlikely given soft demand," Oppenheimer said.

"Elevated inventory" poses another risk, and the large number of completed homes coupled with weaker-than-normal demand may trigger discounts and pressure on gross margins, the report said.

Oppenheimer has a perform rating on D.R. Horton stock.

The homebuilder's shares rose 0.4% in recent Tuesday trading, erasing earlier gains.

Price: 120.31, Change: -0.50, Percent Change: -0.41