KB Home (KBH) Downgraded by Zacks Investment Research

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

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.”

KBH has been the subject of several other reports. MKM Partners reiterated a neutral rating on shares of KB Home in a research note on Tuesday, September 5th. KeyCorp restated a hold rating on shares of KB Home in a research note on Tuesday, September 26th. Wedbush restated a buy rating and issued a $26.00 price objective on shares of KB Home in a research note on Friday, September 22nd. Royal Bank Of Canada restated a hold rating and issued a $25.00 price objective on shares of KB Home in a research note on Tuesday, August 29th. Finally, Credit Suisse Group increased their price objective on shares of KB Home from $24.00 to $25.00 and gave the company a neutral rating in a research note on Friday, September 29th. Five investment analysts have rated the stock with a sell rating, thirteen have given a hold rating and one has assigned a buy rating to the stock. The company has an average rating of Hold and an average price target of $22.44.

KB Home (NYSE KBH) opened at $30.09 on Monday. The company has a market cap of $2,605.39, a price-to-earnings ratio of 21.67, a P/E/G ratio of 0.71 and a beta of 1.69. KB Home has a one year low of $15.51 and a one year high of $31.47.

KB Home (NYSE:KBH) last released its earnings results on Thursday, September 28th. The construction company reported $0.51 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.47 by $0.04. The firm had revenue of $1.14 billion during the quarter, compared to analysts’ expectations of $1.12 billion. KB Home had a net margin of 3.22% and a return on equity of 7.57%. The business’s quarterly revenue was up 24.8% compared to the same quarter last year. During the same period in the prior year, the company earned $0.42 EPS. equities research analysts expect that KB Home will post 1.77 EPS for the current year.

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

In other KB Home 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 transaction of $3,877,500.00. The sale was disclosed in a document filed with the SEC, 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 stock was 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. 8.60% of the stock is currently owned by corporate insiders.

Large investors have recently modified their holdings of the business. Creative Planning grew its holdings in KB Home by 34.9% during the 2nd quarter. Creative Planning now owns 4,289 shares of the construction company’s stock worth $103,000 after acquiring an additional 1,110 shares during the last quarter. AllSquare Wealth Management LLC bought a new stake in KB Home during the 3rd quarter worth about $113,000. LS Investment Advisors LLC grew its holdings in KB Home by 18.0% during the 2nd quarter. LS Investment Advisors LLC now owns 6,511 shares of the construction company’s stock worth $156,000 after acquiring an additional 991 shares during the last quarter. Victory Capital Management Inc. grew its holdings in KB Home by 17.6% during the 2nd quarter. Victory Capital Management Inc. now owns 8,288 shares of the construction company’s stock worth $199,000 after acquiring an additional 1,241 shares during the last quarter. Finally, Yorktown Management & Research Co Inc bought a new stake in KB Home during the 2nd quarter worth about $201,000. 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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