UPDATE: KB Home (KBH) PT Raised to $56 at BofA Securities on Margin Upside

BofA Securities analyst John LoVallo II raised the price target on KB Home (NYSE: KBH) to $56.00 (from $47.00) after the company reported F4Q21 EPS of $1.92, ahead of the $1.75 forecasted. Revenue grew 40.3% YoY to $1.7bn, slightly below expectations but margins were much stronger.

The analyst reiterated a Neutral rating, stating "KBH expects orders to decline mid-single digit YoY in F1Q22, which implies 15% QoQ growth. KBH initiated F2022 guidance of $7.2bn - $7.6bn housing revenue (26%-33% growth) with average selling price (ASP) of $480-$490K (+14-16%). Homebuilding gross margin guidance of 25.4% - 26.2% and operating margin of 15.7% - 16.5% were both significantly ahead of expectations, supported by strong pricing. Community count will accelerate through F2022 and end the year up 20-25% YoY."

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