KB Home Saw 'Meaningful Improvement' In Orders After Price Cuts, Analyst Says

Shares of KB Home ( KBH ) were rising in early trading on Wednesday, after tanking in the previous session on the company's downbeat fiscal first-quarter revenues.

The company is witnessing a softer start to the Spring selling season than in the past few years, according to JPMorgan.

The KB Home ( KBH ) Analyst: Analyst Michael Rehaut reiterated a Neutral rating, while cutting the price target from $74.50 to $68.00.

The KB Home ( KBH ) Thesis: Consumer demand has been impacted by "affordability and macro uncertainty, resulting in slower decision making," Rehaut said in the note.

Check out other analyst stock ratings.

While KB Home ( KBH ) witnessed a steep decline in orders in the first quarter, its margins contracted due to a reduction in prices in mid-February to stimulate demand, he added.

Management lowered their full-year housing revenue guidance by 6% and gross margin guide by 90 basis points at the midpoint, the analyst stated.

Although KB Home ( KBH ) recorded a "meaningful improvement" in orders during the back half of the first quarter, following the price cuts, builders are likely to face "a less supportive demand/supply backdrop in 2025," he wrote.

KBH Price Action: Shares of KB Home ( KBH ) had risen by 1.59% to $59.50 at the time of publication on Wednesday.

Read More:  

• Top 5 Trending Stocks: Nike, Quantum Computing, Fedex, D-Wave Quantum, And Tesla

Photo: Shutterstock