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.
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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.
