KBH - KB Home: Getting Attractive But Rates Are A Risk
2024-04-26 06:23:01 ET
Summary
- KB Home shares have fallen 10% from their recent high due to concerns about the macro environment.
- The company primarily caters to first-time homebuyers, making it more economically sensitive than its peers.
- While KBH has seen strong demand, the recent rise in rates, combined with increased supply, could pressure home prices and margins, creating downside risk to guidance.
Shares of KB Home ( KBH ) have been a strong performer over the past year, rising over 50% as the housing market has held in better than many feared, despite elevated interest rates. Still, shares have fallen 10% from their recent high as long-term yields have moved higher again. Back in January , after being a long-time bull, I downgraded shares to hold, expecting market-like returns, and since this, shares have returned 4% vs. the 5% S&P 500 rally. KB has continued to report strong results, but concerns about the macro environment are increasing, leaving shares in a tricky position....
KB Home: Getting Attractive But Rates Are A Risk