Citizens Maintains Outperform Rating on KB Home (NYSE: KBH) but Cuts Price Target
- Analyst rating: Citizens maintained its Market Outperform rating on KB Home (NYSE: KBH) on September 23, 2026, while lowering its price target from $77 to $70.
- Mixed third-quarter results: Earnings of $1.05 per diluted share beat expectations, while revenue of approximately $1.30 billion was roughly in line with forecasts. Both declined year over year.
- Housing market pressure: Deliveries and net orders fell, although the value of homes in backlog rose 3% to $2.05 billion.
On September 23, 2026, Citizens maintained its Market Outperform rating on KB Home (NYSE: KBH) but reduced its price target to $70 from $77. The firm pointed to weaker buyer traffic and pricing pressure following the homebuilder's third-quarter results.
For the quarter ended August 31, KB Home reported revenue of $1.297 billion, down 20% from a year earlier, and diluted earnings of $1.05 per share, down from $1.61. Earnings exceeded analyst expectations, but revenue was approximately in line with forecasts. Describing the quarter simply as “strong” would obscure the year-over-year decline.
The company delivered 2,732 homes, down 19%, while net orders declined 12% to 2,604. Its ending backlog value rose 3% to $2.05 billion, providing a measure of future contracted business despite slower current sales. KB Home said higher mortgage rates were weighing on affordability and buyer confidence.
KB Home said its Built to Order homes accounted for nearly three-quarters of quarterly deliveries. It also repurchased $50 million of shares and reported $942.4 million in total liquidity as of August 31. That liquidity included $159.0 million in cash and $783.4 million in available credit capacity; it was not all cash on hand.
Profitability remains under pressure. KB Home's housing gross profit margin fell to 16.5% from 18.2% a year earlier. Its full-year outlook calls for a 16.0%-16.2% housing gross profit margin, excluding inventory-related charges, compared with its earlier 16.1%-16.5% range
