Bank of America Securities analyst Rafe Jadrosich has reiterated their neutral stance on KBH stock, giving a Hold rating today.
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Rafe Jadrosich’s rating is based on several key considerations. KB Home’s recent earnings per share for the second quarter were in line with expectations, but the company has lowered its full-year guidance due to a weaker revenue and margin outlook. This adjustment reflects a decrease in net orders and a slowdown in sales, which has led to a reduction in revenue projections. Consequently, the price objective has been adjusted downward, and the earnings per share estimates for the upcoming years have been reduced by 10%.
Despite these challenges, KB Home’s shares are trading at a slight discount to book value, which Jadrosich believes is justified given the projected return on equity for the next two years. The company has also slowed its land spending and increased share repurchases, which may provide some support to the stock. However, the outlook remains cautious as there are risks associated with achieving the revenue guidance if the macroeconomic environment remains weak. These factors collectively contribute to the Hold rating on KB Home’s stock.
In another report released today, KBW also maintained a Hold rating on the stock with a $65.00 price target.
KBH’s price has also changed moderately for the past six months – from $65.900 to $53.320, which is a -19.09% drop .