KB Home (KBH) - Bear of the Day
March 01 2012 - 7:00PM
Zacks
KB Home (KBH) faces a fragile housing market. Increased
availability of housing alternatives may keep the company's
earnings under pressure. Furthermore, the company's housing market
is highly concentrated, which poses threats to its earnings
performance.
The company did post a profit of $0.18 per share during the
fourth quarter of fiscal 2011, which was much higher than the Zacks
Consensus Estimate of $0.03. Nevertheless, the negative factors
have led us to downgrade the recommendation on shares of KB Home
from Neutral to Underperform with a target price of $10.00.
Our long-term Underperform recommendation on the stock indicates
that it will perform lower than the overall market. Our $10 target
price, 25.0X our 2013 EPS estimate, reflects this view.
KB HOME (KBH): Free Stock Analysis Report
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