KB Home (NYSE:KBH), which sells and builds new homes, is scheduled to report its fiscal second-quarter 2023 results on June 21 after the market closes. The housing market is facing a tough time due to high mortgage rates, supply-chain issues, and elevated material costs. Therefore, the company’s performance in the quarter is likely to have been impacted by these factors.
In an update provided on March 23, KBH said its net orders were down 24% year-over-year in the first two-and-a-half weeks of the to-be-reported quarter. Further, the company provided an outlook of net orders to be between 3,000 and 3,700. This reflects a fall of 14% (from the guidance midpoint) from the year-ago quarter when housing demand was being supported by wage growth.
Interestingly, Goldman Sachs analyst Susan Maklari expects orders in the fiscal second quarter to be down 8% with “results driven by closings of units in backlog.” On a positive note, the analyst anticipates the company’s strategic improvements in the past years to have supported the expansion of its return on equity.
In a note to investors on June 6, Maklari reiterated a Buy rating on KBH stock and raised the price target to $49 from $44.
Wall Street’s Fiscal Q2 Expectations
Currently, the analysts expect KB Home to post earnings of $1.33 per share in Q2 compared with $2.32 per share reported in the prior-year period. Meanwhile, revenue is expected to decline about 17% from the year-ago quarter to $1.43 billion.
KBH Stock’s Technical Analysis Reflects a Bullish Trend
Ahead of the fiscal Q2 earnings release, most technical indicators indicate that KBH stock is a Buy. According to TipRanks’ easy-to-understand technical analysis tool, the stock’s 50-Day EMA (exponential moving average) is 44.59, while the stock’s price is $51.19, making it a Buy. Further, KBH’s shorter duration EMA (20-day EMA) also signals an uptrend.
Is KBH a Good Stock to Buy, According to Analysts?
In the past week, two other analysts reaffirmed a Hold rating on the stock, while one analyst has maintained a Buy rating.
Overall, Wall Street analysts are cautiously optimistic about KBH stock. On TipRanks, KB Home has a Strong Buy consensus rating based on five Buys and nine Holds. The average KBH stock price target of $47.75 implies 7.1% downside potential from current levels.
