KBH Downgraded: Goldman Sachs Points Out Spike In Cancellation Rates And Debt Concerns
Portfolio Pulse from Lekha Gupta
Goldman Sachs analyst Susan Maklari has downgraded KB Home (NYSE:KBH) to Neutral from Buy, lowering the price target to $48 from $54. The downgrade reflects lower visibility for KBH's upside compared to its peers. Concerns include a spike in cancellation rates and debt concerns, with KBH's cancellation rate rising 57pts between Q1 FY22 and Q4 FY22, significantly above the sector average of 25pts. The net debt/capital ratio stood at 22% in Q3, compared to the group average of 10%.
October 16, 2023 | 5:19 pm
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KB Home has been downgraded by Goldman Sachs due to concerns over a spike in cancellation rates and higher debt. The net debt/capital ratio stood at 22% in Q3, compared to the group average of 10%.
The downgrade by Goldman Sachs is based on concerns over KBH's higher cancellation rates and debt. This could potentially impact the company's financial stability and future growth, leading to a negative impact on the stock price in the short term.
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