NEW YORK, December 29, 2025, 10:18 ET
- JPMorgan cut its KB Home price target to $50 from $71 and reiterated a Neutral rating. 1
- The bank lowered its 2026 and 2027 earnings estimates after KB Home’s fiscal fourth-quarter report and pegged 2026 return on equity at about 6%. 1
- KB Home shares were down about 0.3% at $57.16 in morning trading, roughly in line with other homebuilders.
JPMorgan Chase cut its price target on KB Home to $50 from $71 and kept a Neutral rating on the homebuilder on Monday, according to a report carried by TheFly. 1
The call is the latest sign that analysts are recalibrating expectations for U.S. homebuilders as weaker demand and heavier incentives squeeze margins heading into 2026. 2
Investors are focusing on whether builders can defend profitability as affordability remains tight and competition shifts toward discounts and financing support to move homes. 2
JPMorgan analyst Michael Rehaut said the bank cut its 2026 and 2027 earnings estimates for KB Home after the company’s fiscal fourth-quarter results, while keeping a Neutral rating — a stance that typically signals an expectation the stock will perform roughly in line with the market. 1
Rehaut estimated KB Home’s fiscal 2026 return on equity at 6%, down from 11% in 2025 and below the company’s cost of capital — the return a business needs to justify the money it raises from lenders and shareholders. 1
KB Home shares were at $57.16, down about 0.3% in morning trade. Lennar was little changed, while D.R. Horton and PulteGroup were down modestly.
KB Home reported fiscal fourth-quarter results on Dec. 18, posting earnings per share of $1.92 versus analysts’ expectations of $1.79, while revenue fell 15.5% from a year earlier to $1.69 billion, MarketBeat reported. 3
The company’s earnings per share were down from $2.52 in the same quarter a year earlier, according to MarketBeat. 3
Margin pressure has been a central issue. ResiClub Analytics said KB Home’s housing gross profit margin was 17.0% in fiscal Q4 2025, down from a cycle peak of 24.1% in Q4 2021 and the lowest Q4 level since 2016. 2
“Adjusted housing gross profit margin was 310 basis points lower due to pricing pressure,” CFO Robert Dillard said on the Dec. 18 earnings call. A basis point is one-hundredth of a percentage point. 2
KB Home has said it plans to lean harder into built-to-order — homes sold before construction begins — to reduce inventory carrying costs and lift margins through customer-paid upgrades and options, ResiClub wrote. 2
The company is targeting built-to-order deliveries of 70% or more of total volume, up from 57% in fiscal Q4 2025, according to ResiClub. 2
ResiClub said KB Home’s net new orders in fiscal Q4 2025 were 2,414, down from 2,688 a year earlier, and that its average selling price is down 8.8% from its 2022 peak. 2
MarketBeat data show KB Home has an average Hold rating from analysts and a consensus price target of about $63.82, above where the stock was trading on Monday. 3
