Zacks Investment Research Upgrades KB Home (KBH) to “Buy”
KB Home (NYSE:KBH) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a report released on Friday. The brokerage presently has a $23.00 price objective on the construction company’s stock. Zacks Investment Research‘s price objective points to a potential upside of 10.15% from the company’s previous close.
According to Zacks, “KB Home shares have outperformed its industry, year to date. It has formulated the right strategy to boost scale in existing geographic footprint, improve profitability per unit, generate higher operating margin and drive earnings, while simultaneously generating positive cash flow to invest in growth and debt reduction. The company’s first half of fiscal 2017 results show an impressive 22% growth in revenues and a double-digit increase in deliveries and housing revenues along with 58% surge in profit level. Strong orders in value (up 21.8%) and backlog (up 19%) in the first half also bode well. However, higher construction and labor costs, rising interest rate as well as competitive pricing pressure are pressing concerns.”
KBH has been the topic of a number of other reports. Wedbush set a $22.00 price objective on shares of KB Home and gave the company a “buy” rating in a research note on Thursday, June 15th. Credit Suisse Group began coverage on shares of KB Home in a research note on Thursday, June 22nd. They issued a “neutral” rating and a $23.00 price objective on the stock. Royal Bank Of Canada reissued a “sector perform” rating and issued a $25.00 price objective (up from $22.00) on shares of KB Home in a research note on Friday, June 23rd. Bank of America Corporation increased their price objective on shares of KB Home from $17.00 to $19.00 and gave the company an “underperform” rating in a research note on Wednesday, June 28th. Finally, MKM Partners raised shares of KB Home to a “hold” rating and increased their price objective for the company from $20.00 to $24.00 in a research note on Tuesday, June 27th. Five equities research analysts have rated the stock with a sell rating, eleven have issued a hold rating and three have given a buy rating to the stock. The stock presently has an average rating of “Hold” and a consensus target price of $20.93.
Shares of KB Home (KBH) opened at 20.88 on Friday. The firm has a market cap of $1.79 billion, a price-to-earnings ratio of 16.09 and a beta of 1.60. KB Home has a 12 month low of $14.06 and a 12 month high of $24.37. The stock has a 50 day moving average of $22.15 and a 200 day moving average of $21.46.
KB Home (NYSE:KBH) last posted its quarterly earnings results on Tuesday, June 27th. The construction company reported $0.33 earnings per share for the quarter, topping the Zacks’ consensus estimate of $0.26 by $0.07. KB Home had a net margin of 3.13% and a return on equity of 7.11%. The business had revenue of $1 billion for the quarter, compared to analysts’ expectations of $929.85 million. During the same period in the prior year, the company posted $0.17 EPS. The business’s revenue for the quarter was up 23.7% on a year-over-year basis. On average, equities research analysts expect that KB Home will post $1.69 EPS for the current fiscal year.
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In other news, insider Jeffrey T. Mezger sold 400,000 shares of the stock in a transaction dated Monday, August 14th. The shares were sold at an average price of $22.81, for a total transaction of $9,124,000.00. Following the transaction, the insider now directly owns 682,996 shares in the company, valued at approximately $15,579,138.76. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, CFO Jeff Kaminski sold 163,017 shares of the stock in a transaction dated Thursday, June 29th. The stock was sold at an average price of $23.40, for a total transaction of $3,814,597.80. Following the transaction, the chief financial officer now owns 178,251 shares in the company, valued at $4,171,073.40. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 620,422 shares of company stock worth $14,269,820. 8.60% of the stock is owned by insiders.
Several hedge funds have recently made changes to their positions in the company. BlackRock Inc. lifted its holdings in shares of KB Home by 19,999.6% during the 1st quarter. BlackRock Inc. now owns 10,064,270 shares of the construction company’s stock worth $200,078,000 after acquiring an additional 10,014,198 shares during the period. Donald Smith & CO. Inc. lifted its holdings in shares of KB Home by 2.5% during the 1st quarter. Donald Smith & CO. Inc. now owns 6,930,463 shares of the construction company’s stock worth $137,778,000 after acquiring an additional 169,696 shares during the period. Vanguard Group Inc. lifted its holdings in shares of KB Home by 7.7% during the 2nd quarter. Vanguard Group Inc. now owns 6,884,880 shares of the construction company’s stock worth $165,031,000 after acquiring an additional 492,594 shares during the period. Dimensional Fund Advisors LP lifted its holdings in shares of KB Home by 16.4% during the 2nd quarter. Dimensional Fund Advisors LP now owns 2,803,374 shares of the construction company’s stock worth $67,196,000 after acquiring an additional 394,584 shares during the period. Finally, State Street Corp lifted its holdings in shares of KB Home by 3.2% during the 2nd quarter. State Street Corp now owns 2,665,501 shares of the construction company’s stock worth $63,890,000 after acquiring an additional 83,179 shares during the period. Institutional investors and hedge funds own 98.37% of the company’s stock.
KB Home Company Profile
KB HOME is a homebuilding company. The Company is engaged in selling and building a range of new homes designed primarily for first-time, move-up and active adult homebuyers, including attached and detached single-family residential homes. It operates through five segments, which consist of four homebuilding segments and one financial services segment.
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