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KB Homes drops 17% after dimming view for Q4, 2019

Nov. 15, 2018 11:23 AM ETKB Home (KBH) StockKBH, TOL, PHM, DHI, LEN, BZH, ITBBy: Liz Kiesche, SA News Editor12 Comments
  • KB Homes (NYSE:KBH) sinks 17% after cutting Q4 housing revenue guidance to $1.31B-$1.34B from its previous range of $1.39B-$1.45B; consensus estimate $1.42B.
  • As a result, Bank of America Merrilll Lynch downgrades KBH to neutral.
  • Q4 average selling price forecast reduced to $395,00-$400,000 vs. $400,00-$405,000.
  • Now sees Q4 housing gross profit margin of 18.3%-18.6% vs. 18.3%-18.7%.
  • Also cuts top end of Q4 homebuilding operating income margin forecast range: 9.3%-9.5% vs. 9.3%-9.7%.
  • Cuts full-year 2019 housing revenue guidance to $4.7B-$5.2B from prior view of $5.0B-$5.3B; homebuilding operating income margin expected at 7.7%-8.7%.
  • The stock decline isn't limited to KBH; the iShares U.S. Home Construction ETF (BATS:ITBslides 3.1%.
  • Other homebuilders falling: Beazer Homes (BZH -6.5%), Toll Brothers (TOL -5%), Lennar (LEN -5.1%), D.R. Horton (DHI -3.1%), PulteGroup (PHM -3.1%).
  • Previously: Homebuilders a buy on seasonality - Fundstrat (Nov. 9)

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