Ticonderoga Maintains a 'Buy' on KB Home (KBH); Results and Outlook Better Than First Look, But Significant Work to Do
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Price: $56.06 --0%
Rating Summary:
4 Buy, 24 Hold, 7 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 7 | Down: 12 | New: 19
Rating Summary:
4 Buy, 24 Hold, 7 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 7 | Down: 12 | New: 19
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Ticonderoga maintains a 'Buy' on KB Home (NYSE: KBH), PT $16.
Ticonderoga analyst says, "Operationally, KBH took a meaningful step back this quarter. From top-to-bottom, the company’s 1Q results were a disappointment save the better than expected Revenue. However, management’s further color on the quarter provided some needed relief. Importantly, the meaningful Inspirada overhang has been dispatched, thus providing some cover for the equity. Given this, we believe Tuesday’s decline in the stock was appropriate, all else equal. This recovery is now a late 2011 story, in our opinion, but the company’s discounted valuation versus the group compensates investors with patience and a bit of fortitude. With new communities coming online at a rather quick clip, we believe KB is positioned to regain much of the past few quarters’ improvements just conceded."
"The Inspirada commentary was much more in depth than we had expected. It appears that KBH is now fully reserved against both the JP Morgan (NYSE: JPM)(Not-Rated) claim and the Focus Property judgment. The only remaining item to be determined is the amount of the actual cash payment, for which the company has ample liquidity. Employing an estimated $212M use of cash, KBH would then bring roughly $137M of Inspirada land onto its books."
For more ratings news on KB Home click here and for the rating history of KB Home click here.
Shares of KB Home closed at $11.69 yesterday.
Ticonderoga analyst says, "Operationally, KBH took a meaningful step back this quarter. From top-to-bottom, the company’s 1Q results were a disappointment save the better than expected Revenue. However, management’s further color on the quarter provided some needed relief. Importantly, the meaningful Inspirada overhang has been dispatched, thus providing some cover for the equity. Given this, we believe Tuesday’s decline in the stock was appropriate, all else equal. This recovery is now a late 2011 story, in our opinion, but the company’s discounted valuation versus the group compensates investors with patience and a bit of fortitude. With new communities coming online at a rather quick clip, we believe KB is positioned to regain much of the past few quarters’ improvements just conceded."
"The Inspirada commentary was much more in depth than we had expected. It appears that KBH is now fully reserved against both the JP Morgan (NYSE: JPM)(Not-Rated) claim and the Focus Property judgment. The only remaining item to be determined is the amount of the actual cash payment, for which the company has ample liquidity. Employing an estimated $212M use of cash, KBH would then bring roughly $137M of Inspirada land onto its books."
For more ratings news on KB Home click here and for the rating history of KB Home click here.
Shares of KB Home closed at $11.69 yesterday.
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