Is KB Home (NYSE:KBH) Now a Sell? Why did Credit Suisse Downgrade The Stock?


KB Home (NYSE:KBH) Receives a Downgrade

Credit Suisse has given KB Home (NYSE:KBH) shares a new “Underperform” rating in an analyst note issued to clients and investors on Tuesday morning. This was a cut price from the past “Neutral” rating.

From a total of 16 analysts covering KB Home (NYSE:KBH) stock, 4 rate it a ”Buy”, 2 a “Sell”, and 14 a ”Hold”. This means that 20% of the ratings are positive. The highest target price is $20 while the lowest target price is $15. The mean of all analyst targets is $16.56 with a 26.41% above today’s ($12.42) stock price. KB Home was the topic of 8 analyst reports since September 4, 2015 according to the firm StockzIntelligence Inc. Bank of America reinitiated shares on October 21 with “Underperform” rating. Morgan Stanley upgraded KBH stock in a recent report from October 13 to “Equal-Weight” rating. Finally, Compass Point maintained the stock with “Neutral” rating in a report issued on a September 24.

Approximately 1.95M shares of stock traded hands. KB Home (NYSE:KBH) has declined 13.17% since May 12, 2015 and is downtrending. It has underperformed by 9.50% the S&P500.

Analysts await KB Home (NYSE:KBH) to reports earnings on January, 12. They expect $0.52 earnings per share, up 92.59% or $0.25 from last year’s $0.27 per share. KBH’s profit will be $47.31 million for 5.97 P/E if the $0.52 EPS becomes reality. After $0.23 actual earnings per share reported by KB Home for the previous quarter, Wall Street now forecasts 126.09% EPS growth.

The overall sentiment of institutions has decreased to 0.97 in Q2 2015. Its down 0.19, from 1.16 in 2015Q2. The ratio is negative, as 34 institutions have sold all the shares of KB Home that they owned while 66 funds have taken shares off the table. 27 funds have purchased shares for the first time while 70 added to their positions. These institutions now hold 80.75 million shares or 2.45% more than the 78.82 million shares they owned in 2015Q2.

The Fund Messner & Smith Theme Value Investment Management Ltd Ca currently is holding shares equating to 4.41% of its total portfolio in KB Home representing a total of 164,759 shares. Another fund,Wexford Capital Lp, is holding a total of 711,505 shares equating to 1.86% of their holdings. Additionally, Element Capital Management Llc has a 366,816 share stake in KB Home which represents 1.8% of their total portfolio. The Fund, Odey Asset Management Group Ltd, based out of United Kingdom, has also built up a stake in the stock, which represents a total of 1.78% of their total portfolio. Finally Lmm Llc, a fund which is based in the state of Maryland reported a total holdings of 3.07 million shares.

KB Home is a homebuilding company that constructs and sells homes through its operating divisions under the name KB Home. The company has a market cap of $1.13 billion. The Firm operates through five operating divisions, which includes four homebuilding divisions and one financial services segment. It has 1.41 P/E ratio. The Company’s homebuilding activities are organized into four divisions: West Coast, Southwest, Central and Southeast.

According to Zacks Investment Research, “KB Home is a builder of single-family homes with domestic operations in several western states, and international operations in France. Domestically, the company builds innovatively designed homes which cater primarily to first-time homebuyers, generally in medium-sized developments close to major metropolitan areas. Internationally, the company also builds commercial projects and high density residential properties such as condominium complexes.”