KB Home share price target raised by Wedbush on strong demand
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On Thursday, Wedbush maintained a Neutral rating on KB Home (NYSE:KBH) but increased its share price target to $64 from the previous $60. This adjustment reflects the homebuilder’s ability to raise prices in half of its communities and maintain prices in another 40% during the first quarter of fiscal 2024.
The firm noted that KB Home reported a significant year-over-year increase in orders, with January seeing a 46% rise and February a 53% surge in demand.
KB Home’s financial strategy includes the utilization of its current share repurchase authorization, which has $113 million remaining. The company’s management has expressed intentions to use this balance throughout the fiscal year 2024 and to seek a new authorization from the Board of Directors.
The positive developments in pricing and demand have led Wedbush to revise its earnings per share (EPS) estimates for KB Home for fiscal years 2024 and 2025. The updated estimates now incorporate an anticipated $50 million in share buybacks each quarter through the fourth quarter of fiscal 2025.
The company’s strategic pricing and demand management, coupled with its share repurchase program, are key factors contributing to Wedbush’s updated financial outlook for KB Home. The firm’s analysis indicates a steady performance for the homebuilder, underpinned by a robust demand trend as observed in the early months of the year.
