Wells Fargo downgraded KBH to "underperform" from "equal weight"
KB Home (NYSE:KBH) is down 2.9% to trade at $79.42 this morning, after Wells Fargo downgraded the homebuilder stock to "underperform" from "equal weight." The analyst in coverage noted KBH could lag its sector competitors in 2025 amid structurally lower EBIT margins.
The analyst did, however, raise its price target to $83 from $80. Coming into today, the majority of analysts were already pessimistic, and the 12-month average target price of $84.92 is a 6.2% premium to the equity's current perch.
KBH is now testing $80 -- an area that has stepped up as support since August -- while its 80-day moving average sits just below as another potential layer of support to monitor today. The shares hit an 18-year high on Sept. 19 but have since turned in two negative weekly performances. Longer term, the equity still boasts a 28.3% year-to-date lead.
Puts have been more popular than usual in recent months. KBH's 50-day put/call volume ratio of 1.43 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ranks higher than 79% of readings from the last 12 months.