NEW YORK (TheStreet) -- Shares of KB Home are rising, up 0.82% to $13.56 in early market trading Monday, after the homebuilding company was upgraded by equities research analysts at JMP Securities to an "outperform" from a "market perform" rating this morning. The firm raised its rating with a $17 price target, saying the homebuilder's risk in Texas from lower oil prices is being overstated given the improving macroeconomic fundamentals across the U.S. Analysts noted, "Our analysis of the Texas market solidifies our belief that KBH should generate tangible earnings over the next two years and with the stock trading at 0.9x current adjusted book, we see shares as oversold given investor frustration with operational performance over the last twelve months." Similarly, JMP also upgraded its rating on shares of peer companies D.R. Horton and Ryland Homes to "outperform" this morning. L.A.-based KB Home is a homebuilding company engaged in construction and sale of homes, townhomes and condominiums. The company operates a homebuilding and financial services business serving homebuyers throughout the U.S. Separately, TheStreet Ratings team rates KB HOME as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation: "We rate KB HOME (KBH) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 28.7%. Growth in the company's revenue appears to have helped boost the earnings per share. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Durables industry and the overall market, KB HOME's return on equity significantly exceeds that of both the industry average and the S&P 500. The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 2933.2% when compared to the same quarter one year prior, rising from $28.12 million to $852.80 million. Net operating cash flow has significantly increased by 304.56% to $85.97 million when compared to the same quarter last year. In addition, KB HOME has also vastly surpassed the industry average cash flow growth rate of 27.84%. You can view the full analysis from the report here: KBH Ratings Report
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