ISI Group Reiterates Cautious Rating on KB Home Following Conference Call

In a report published Friday, ISI Group analyst Stephen East reiterated a Cautious rating and $14.50 price target on KB Home KBH. In the report, East noted, “In typical fashion, KBH management was quite bullish during the conference call, as they laid out their dual strategy of improving profitability while accelerating top-line growth. Additionally, they reversed course a bit, emphasizing KBH remains dedicated the first time buyer, albeit the more affluent customer, versus the move up focus highlighted on the last several conference calls. Its strategy of Build-to-Order in the most land-constrained markets, which drives product mix and ASP's usefully higher, is a clear bet on riding the wave. The company also outlined several new initiatives that ostensibly allow them to do more than ride that wave.” KB Home closed on Thursday at $22.03.