KB Home rises after RBC lifts rating on valuation, investor view

KB Home

10/01/2025 13:02

** U.S. homebuilder KB Home's shares  KBH.N  rise 5.3% to
$68.77 premarket
    ** RBC Capital Markets upgrades KBH to "sector perform" from
"underperform"
    ** Says the upgrade is valuation-based following recent 
declines and resets to investor expectations for homebuilders in
FY 2025 amid affordability challenges and volatile rate
environment
    ** "Investor sentiment has shifted meaningfully more
negative over the past several months, better balancing
risk/reward in our view" - RBC
    ** Brokerage cuts PT to $67 from $70, still a 2.5% upside to
the stock's last close
    ** Expects KBH's upcoming quarterly results and guidance to
be weak on both orders and margins
    ** "Gross margins are likely to see significant pressure, as
sluggish demand will pressure price and cause the need for
greater incentives" - RBC
    ** Four brokerages rate KBH "buy", nine "hold" and three
"sell" or lower; their median PT is $82 - LSEG compiled data
    ** In 2024, stock had risen 5.2%

 (Reporting by Aatreyee Dasgupta)
 ((Aatreyee.Dasgupta@thomsonreuters.com))