KBH Stock Soars On Earnings, Guidance As Rival Hikes Dividend
Homebuilder KB Home reported stronger-than-forecast fourth-quarter results late Wednesday. Industry heavyweight Lennar boosted its dividend by 50%. KBH stock soared Thursday while Lennar eked out a gain.
KB Home's earnings jumped to $1.91 per share while revenue rose 40% to $1.68 billion. Analysts polled by FactSet expected EPS of $1.77 on revenue of $1.71 billion.
KB deliveries rose 28% year-over-year to 3,679, while the average selling price increased 9% to $451,100.
"We begin 2022 well-positioned to continue to deliver returns-focused growth," CEO Jeffery Mezger. "Our nearly $5 billion in backlog value and projected substantial year-over-year increase in community count support significant revenue growth this year."
For 2022, the company sees revenue of $7.2 billion to $7.6 billion and for its homebuilding margins to improve to 15.7% to 16.5%.
Shares jumped 16.5% to 49.38 on the stock market today. KBH stock has been mired in a six-month consolidation, according to MarketSmith analysis. The earnings beat sent shares back above their converged 50-day and 200-day moving averages.
Homebuilders have profited during the pandemic as living patterns change amid a shift toward working from home. But companies have faced issues with rising costs tied to labor shortages and supply chain problems.
CFRA analysts reiterated their buy rating on KBH stock following the homebuilder's quarterly report and raised their price target to 59 from 49.
"We expect strong demand in 2022 as KBH's pricing power is able to pass on higher costs to higher prices with limited supply," CFRA wrote. "KBH is not seeing affordability issues with homebuyers selecting larger homes and average selling prices +9%" year over year.
Also Wednesday, Lennar announced late Wednesday it was raising its dividend to $1.50 per share from $1.00 per share. The dividend is payable on Feb. 10 to holders of record at the close on Jan. 27.
"Given our confidence in our operating platform and resulting cash flow generation, we continue to believe a balanced program of debt reduction, stock repurchase and an increased dividend, is appropriate," Executive Chairman Stuart Miller said in prepared remarks.
Lennar shares edged up 0.6% to 108.54 after hitting 112.49 intraday. The housing stock is technically in buy range after breaking out of a cup with handle base with a 104.17 entry point last month.
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