12 Best Consumer Discretionary Stocks to Buy According to Analysts

7. M/I Homes Inc. (NYSE:MHO)

Upside Potential: 51%

Number of Hedge Fund Holders: 29

M/I Homes Inc. (NYSE:MHO) is a prominent builder of single-family homes in the United States, primarily focusing on high-growth markets. The company offers a diverse range of home designs and customization options to meet the needs of a broad segment of the housing market, including first-time buyers, move-up buyers, luxury home buyers, and empty nesters.

On January 29, M/I Homes Inc. (NYSE:MHO) reported its Q4 and FY 2024 results. In Q4, the company delivered 2,402 homes, a 19% increase from the same period in 2023, resulting in a 24% rise in revenue to $1.2 billion. Pre-tax income grew by 24% to $171 million, while net income increased by 27%, reaching $133.5 million (or EPS of $4.71). For the full year, the company delivered 9,055 homes, generating $4.5 billion in revenue. In 2024, new contracts totalled 8,584, an 8% increase from 7,977 new contracts in 2023 (new contracts are agreements for the purchase of new homes that the company will build). M/I Homes Inc. (NYSE:MHO) CEO Robert H. Schottenstein highlighted the company’s strong performance and expressed optimism for 2025, citing favourable industry fundamentals such as strong demographic trends and a housing undersupply.

On January 30, Raymond James analyst maintained his Strong Buy rating on M/I Homes Inc. (NYSE:MHO) although with a lowered price target of $168 versus $210 earlier. According to him, M/I Homes presents one of the most compelling risk/reward profiles in the homebuilding sector given his estimate that the company would generate a high-teens return on invested capital (ROIC) with a net debt-free balance sheet. He views M/I Homes Inc. (NYSE:MHO) as attractively valued, even considering the expected margin pressure from higher mortgage rates throughout FY 2025.