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Investing.com - UBS lowered its price target on KB Home (NYSE:KBH) to $80.00 from $86.00 on Tuesday, while maintaining a Buy rating on the homebuilder’s stock.
The price target reduction follows KB Home’s fiscal second-quarter operating results and the company’s revised financial outlook for fiscal year 2025, which prompted UBS to adjust its earnings expectations.
UBS reduced its adjusted earnings per share estimates for KB Home to $6.60 from $7.40 for fiscal 2025, to $8.00 from $8.60 for fiscal 2026, and to $9.55 from $9.80 for fiscal 2027.
The firm attributed the revised estimates to softer volume and margin expectations, partially offset by higher than previously modeled share repurchases. The new price target is based on what UBS describes as an "undemanding multiple" of approximately 10 times its fiscal 2026 earnings per share estimate.
Despite acknowledging choppy market conditions, UBS maintained its Buy rating on KB Home shares, noting that the setup for homebuilder stocks remains favorable given reset expectations and the sector’s tendency to bounce ahead of market bottoms.
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