Wedbush lowered the firm’s price target on KB Home to $55 from $64 and keeps an Outperform rating on the shares. The firm notes KB’s Q3 closings beat its estimate on lower cycle times and pulled some closings into Q3 from Q4. This pull forward produced a Q3 gross margin of 21.5% actual versus Wedbush’s 20.7% estimate, but apparently will have a negative impact on Q4’s gross margin, with KB forecasting 20.5% versus the firm’s prior 21.4%. KB now expects Q4 to be the inflection point for gross margins versus the previous forecast of Q3. Additionally, KB expects a sequential community count decline from Q3 to Q4 with a community count lift starting in Q2 2024.
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Read More on KBH:
- Here’s What Kept Redfin (NASDAQ:RDFN) & Other Real Estate Stocks Under Pressure Yesterday
- KB Home sees FY24 housing revenue $6.5-$7B
- KB Home sees Q4 housing revenue $1.55B-$1.65B
- KB Home down 2% at $47.01 after Q3 results and FY23 guidance update
- KB Home reports Q3 home deliveries down 7% from last year at 3,375
