UPDATE: Williams Financial Group Downgrades KB Homes to Sell; Not Capitalizing on Opportunities

Williams Financial Group reduced its rating on KB Homes KBH from Hold to Sell with a reiterated $11 price target. Williams Financial Group noted, "Following another disappointing performance in orders, margins, community count and deliveries, we are downgrading shares of KBH to a Sell from a Hold rating.  While ASP trends have seen the sharpest rise among the companies we follow, we are disappointed that pricing has not yet meaningfully benefitted gross margins. Construction inflation added about $5K to build costs while ASP's moved up $25k q/q. Although some of the pricing movement can be attributed to geographic mix, we would have expected at least a moderate level of organic price increases to flow through to gross margin." KB Home closed at $15.60 on Thursday.