- RBC Capital maintains a “Sector Perform” rating for KB Home (NYSE:KBH), with a slight increase in the price target from $58 to $59.
- High mortgage rates and affordability issues are impacting demand, particularly from first-time buyers, squeezing profit margins.
- KB Home is implementing cost control measures and stock buybacks to mitigate the impact of these challenges.
KB Home (NYSE:KBH) is a prominent player in the homebuilding industry, known for constructing a variety of homes across the United States. The company faces competition from other major builders like Lennar and D.R. Horton. On September 25, 2025, RBC Capital maintained its “Sector Perform” rating for KBH, advising investors to hold the stock. At that time, the stock was priced at $63.92, as highlighted by TheFly.
RBC Capital’s decision to maintain a “Sector Perform” rating comes amid challenges for KB Home. Affordability issues and high mortgage rates are impacting demand, especially from first-time buyers. These factors are squeezing profit margins, making it difficult for the company to improve its financial performance. Despite these challenges, RBC Capital raised the price target slightly from $58 to $59.
The company’s current stock price is $63.69, showing a modest increase of 2.09% or $1.31. However, KB Home’s shrinking backlog and exposure to weaker geographic markets are concerning. The reduced sales guidance indicates that the company may continue to face performance softness through 2026. These issues are compounded by high mortgage rates, which need to fall below 6% for significant improvement.
Despite these hurdles, KB Home is taking steps to mitigate the impact. Cost control measures and stock buybacks are providing some support to the stock. The stock has traded between $62.52 and $65.38 today, with a market capitalization of approximately $4.33 billion. The trading volume on the NYSE is 402,730 shares, reflecting investor interest.
Over the past year, KBH has experienced a high of $86.73 and a low of $48.90. This volatility highlights the challenges and opportunities in the housing market. While the company is making efforts to navigate these challenges, the path to significant improvement remains uncertain without a decrease in mortgage rates.
