Analyst Double Downgrades KB Home Stock

Now looks like a good time to weigh in with options

Deputy Editor
Mar 6, 2023 at 10:59 AM
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KB Home (NYSE:KBH) received a double downgrade from J.P. Morgan Securities this morning. The firm slashed its rating to "underweight" from "overweight," with a price-target cut to $32.50 from $36, noting the stock valuation is too high. At last glance, KBH is down 1% at $35.39. 

Support at its 60-day moving average appears to be keeping KBH's losses in check today, though it's worth noting that the overhead $36 level has been pressuring the shares over the last few weeks. Year-to-date, the equity is up 11.4%. 

Of the 16 analysts in coverage, six carried a "buy" or better rating coming into today, with eight saying "hold," and two "sell" or worse. The 12-month consensus price target of $41.27 is a 16.1% premium to current levels. It's also worth noting that short interest makes up 6.9% of the stock's available float, or nearly four days' worth of pent-up buying power. 

Now looks like an opportune time to weigh in with options. The stock is seeing attractively priced premiums at the moment, per KBH's Schaeffer's Volatility Index (SVI) of 34%, which sits in the low 1st percentile of its annual range. 

 

 

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