Williams Financial Group Upgrades KB Home (KBH) to Hold
Williams Financial Group upgraded KB Home (NYSE: KBH) from Sell to Hold with a price target of $22, saying the turnaround is finally in sight with solid improvements across the entire business.
The analyst commented, "Overall, the company delivered a strong quarter beating our expectations across the board. We have largely held that the firm’s growth trajectory and profitability would remain challenged due in part to its product positioning, build‐to‐order strategy and limited supply of quality land. We believe this was most obvious in the early stages of the turn as the company’s business improved only marginally as the rest of the group’s performance outpaced KBH by a wide margin. However, it appears that the company’s strategic re‐balancing over the last several years has finally begun to flow through, well ahead of where we had anticipated. Further, demand levels in the West seem to be outstripping even most aggressive estimates, which should continue to drive top line growth while supporting incremental operational improvements. Given the
companies intense focus within this region, with significant levels of land spend and the longer term favorable demographics, we are much more comfortable today with the fundamental trajectory. We have re‐evaluated our base case assumptions and are increasing our FY13 and FY14 outlook to capture the recent improvements."
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 $21.77 yesterday, with a 52 week range of $6.46-$22.38.
The analyst commented, "Overall, the company delivered a strong quarter beating our expectations across the board. We have largely held that the firm’s growth trajectory and profitability would remain challenged due in part to its product positioning, build‐to‐order strategy and limited supply of quality land. We believe this was most obvious in the early stages of the turn as the company’s business improved only marginally as the rest of the group’s performance outpaced KBH by a wide margin. However, it appears that the company’s strategic re‐balancing over the last several years has finally begun to flow through, well ahead of where we had anticipated. Further, demand levels in the West seem to be outstripping even most aggressive estimates, which should continue to drive top line growth while supporting incremental operational improvements. Given the
companies intense focus within this region, with significant levels of land spend and the longer term favorable demographics, we are much more comfortable today with the fundamental trajectory. We have re‐evaluated our base case assumptions and are increasing our FY13 and FY14 outlook to capture the recent improvements."
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 $21.77 yesterday, with a 52 week range of $6.46-$22.38.