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Compass Point Cuts Price target on KB Home (KBH) Following 3c EPS Beat

September 24, 2015 2:14 PM EDT
Get Alerts KBH Hot Sheet
Price: $67.06 -1.24%

Rating Summary:
    7 Buy, 23 Hold, 3 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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Compass Point reiterated a Neutral rating on KB Home (NYSE: KBH), and cut the price target to $15.00 (from $16.00), following the company's 3Q15 earnings. KBH reported earnings with core EPS of $0.25, beating the Street's consensus estimate of $0.22 by 3 cents. Organic orders fell short at -9.1% growth, continuing the Company's 4-quarter streak of negative organic orders growth.

Analyst Wilkes Graham commented, "We maintain our Neutral rating and lower our price target to $15.00 from $16.00 on shares of KBH. KBH reported weaker than expected 3Q15 earnings results characterized by a 400 bp closings growth miss, 800 bp orders growth miss, 40 bp HB margin miss, and 30 bp SG&A margin miss. Further, while the Company's orders were up 19% during the quarter, community count was up 30% yoy, and drove KBH's organic orders to its 5th consecutive quarter of negative organic orders growth of -9%. While we respect Management's attempt to push pricing over pace, we need to see (1) more consistent margin prints and (2) positive organic orders growth before we can become more constructive on the name. Below we provide highlights from the quarter, along with key takeaways from Management on the earnings call."

For an analyst ratings summary and ratings history on KB Home click here. For more ratings news on KB Home click here.

Shares of KB Home closed at $14.45 yesterday.



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