KB Home upgraded to Buy from Sell at Goldman Sachs

Goldman Sachs analyst double Susan Maklari upgraded KB Home to Buy from Sell with a price target of $51, up from $32. The company's build-to-order strategy leaves it well positioned entering 2021 with a backlog up 54%, bucking seasonal norms and providing greater visibility to near-term earnings, Maklari tells investors in a research note. The analyst sees KB's results benefitting from community count growth starting in the second half of the year, quarterly EBIT margin expansion through the year and easier comparisons as it laps the "self-induced, more restrictive shutdown" it endured in 2020 as the pandemic set in. Heading into the selling season for Homebuilders, Homebuilders highlights Buy-rated D.R. Horton (DHI), PulteGroup (PHM) and KB Home as top picks.

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