KB Home (KBH) Downgraded to “Hold” at Zacks Investment Research

Zacks Investment Research cut shares of KB Home (NYSE:KBH) from a buy rating to a hold rating in a report issued on Monday.

According to Zacks, “KB Home 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 reported an impressive 23% growth in revenues, double-digit increase in deliveries and 41% surge in net income, in the first nine months of 2017. The upside was primarily driven by an ongoing housing market recovery and favorable industry fundamentals. The company expects the uptrend to continue to 2018. KB Home shares have widely outperformed the homebuilding industry, year to date. Also, the trend in current-year earnings estimate revisions is satisfactory. Estimates moved upward over the past sixty days, reflecting analysts’ optimism. However, higher construction and labor costs, rising interest rate as well as competitive pricing pressures raise concern.”

Other equities analysts also recently issued research reports about the stock. Wedbush restated a buy rating and set a $26.00 price objective on shares of KB Home in a research report on Friday, September 22nd. BidaskClub downgraded shares of KB Home from a strong-buy rating to a buy rating in a research report on Friday, August 11th. Keefe, Bruyette & Woods restated a hold rating and set a $24.00 price objective on shares of KB Home in a research report on Friday, September 29th. KeyCorp restated a hold rating on shares of KB Home in a research report on Tuesday, September 26th. Finally, Royal Bank Of Canada restated a hold rating and set a $25.00 price objective on shares of KB Home in a research report on Tuesday, August 29th. Five analysts have rated the stock with a sell rating, thirteen have assigned a hold rating and one has given a buy rating to the company’s stock. The company has an average rating of Hold and an average price target of $22.44.

Shares of KB Home (KBH) traded down $0.33 during trading hours on Monday, reaching $30.45. 2,497,900 shares of the company were exchanged, compared to its average volume of 2,538,125. The firm has a market cap of $2,630.00, a PE ratio of 22.14, a P/E/G ratio of 0.73 and a beta of 1.69. KB Home has a 12-month low of $15.16 and a 12-month high of $31.47.

KB Home (NYSE:KBH) last announced its quarterly earnings data on Thursday, September 28th. The construction company reported $0.51 EPS for the quarter, topping the Zacks’ consensus estimate of $0.47 by $0.04. The company had revenue of $1.14 billion during the quarter, compared to the consensus estimate of $1.12 billion. KB Home had a net margin of 3.22% and a return on equity of 7.57%. KB Home’s quarterly revenue was up 24.8% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.42 EPS. sell-side analysts predict that KB Home will post 1.77 EPS for the current year.

The business also recently declared a quarterly dividend, which was paid on Thursday, November 16th. Stockholders of record on Thursday, November 2nd were issued a $0.025 dividend. The ex-dividend date was Wednesday, November 1st. This represents a $0.10 dividend on an annualized basis and a dividend yield of 0.33%. KB Home’s dividend payout ratio is presently 7.19%.

In other news, EVP Albert Z. Praw sold 150,000 shares of the stock in a transaction dated Monday, October 9th. The shares were sold at an average price of $25.85, for a total value of $3,877,500.00. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, EVP Brian J. Woram sold 49,529 shares of the stock in a transaction dated Thursday, October 12th. The shares were sold at an average price of $27.11, for a total transaction of $1,342,731.19. The disclosure for this sale can be found here. Company insiders own 8.60% of the company’s stock.

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. GSA Capital Partners LLP acquired a new stake in KB Home in the 3rd quarter valued at about $247,000. Piedmont Investment Advisors LLC acquired a new stake in KB Home in the 3rd quarter valued at about $1,041,000. California Public Employees Retirement System grew its stake in KB Home by 12.1% in the 3rd quarter. California Public Employees Retirement System now owns 280,808 shares of the construction company’s stock valued at $6,773,000 after acquiring an additional 30,408 shares during the last quarter. Janney Montgomery Scott LLC acquired a new stake in KB Home in the 3rd quarter valued at about $706,000. Finally, Cubist Systematic Strategies LLC grew its stake in KB Home by 1,325.3% in the 3rd quarter. Cubist Systematic Strategies LLC now owns 130,483 shares of the construction company’s stock valued at $3,147,000 after acquiring an additional 121,328 shares during the last quarter. 96.95% of the stock is currently owned by hedge funds and other institutional investors.

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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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