UPDATE: Sterne Agee Initiates KB Home at Neutral on Valuation
Sterne Agee initiated coverage on KB Home (NYSE: KBH) with a Neutral rating and an $18.00 price target.
Sterne Agee analyst Jay McCanless noted, "We are valuing KBH at a 15.0x P/E multiple on our FY14E (FY ends in November) EPS of $1.17, which is at the low end of our FY14E P/E valuation range of 15.0x to 20.0x FY14E EPS. Since KBH's Y/Y operating comparisons for quarterly orders, closings, etc. have meaningfully lagged the peer average for over four quarters, we are hesitant to pay up for earnings at KBH's current valuation."
KB Home closed at $20.27 on Wednesday.
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