KB Home: Fed's Rate Cut Improves 2025 Housing Market Outlook
Summary
- The Fed's interest rate cut improves the housing market outlook, and KB Home is well positioned to capture growth in 2025 from an industry recovery.
- While KB Home's ROE and gross margin trail some peers, the company's profitability stands great with a great incremental ROIC.
- The structural undersupply in housing looks to aid KB Home and other homebuilders further.
- I estimate KBH stock to have a 39% upside into a fair value of $96.4 given the improving outlook.
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