KB Home outlook improving, says Argus

Argus keeps a Hold rating on KB Home but boosts the firms FY23 EPS estimate to $6.91 from $6.34, reflecting the better-than-expected earnings in Q3 and an increase in its Q4 estimate. Argus expects KB Home to emphasize markets with favorable economic and population growth, cater to Millennial-generation buyers and first-time buyers, boost profit per home with greater customization and lower expenses, and improve asset efficiency by scrutinizing land investment, reducing speculative inventories, and generating higher sales per community, the analyst tells investors in a research note. Argus adds however that its greatest concern is that inflation has pushed mortgage rates higher and hurt affordability and home prices.