KB Home (KBH) Isn’t A “Crybaby” But It Wants Lower Rates, Says Jim Cramer

KB Home (NYSE:KBH) is one of the Jim Cramer Says Trump’s Angry At Everybody & Discusses These 11 Stocks.

KB Home (NYSE:KBH) is a home building company that is frequently discussed by Cramer on his morning show. Its shares are down by 19.4% year-to-date as high interest rates continue to impact the housing market. KB Home (NYSE:KBH)’s shares have suffered from several negative catalysts which include a slowdown of consumer demand leading to weak quarterly results. The firm’s latest earnings report saw it cut its full-year guidance to a midpoint of $6.4 billion from an earlier 6.80 billion. The guidance missed analyst estimates of $6.57 billion.  Here’s what Cramer said about KB Home (NYSE:KBH):

“Look there’s too many KB Homes. I mean KB Homes, I like to default to the actual companies, KB Homes is again, and KB Homes just said listen, we would have done much better but the rates are too high. I keep waiting, for the great teaser rate that you would get if the Fed cut rates. Will you get a three, teaser, which would then, I would be able to use instead of, give up my three and a half?

“Look you know I think that Chairman Powell is terrific. He wants to see what happens with the tariffs. But at the same time there’s no doubt about it, KB Homes, big home builder, not a crybaby, saying listen, rates are too high.

“[On KBH saying market conditions have softened] They have. I think they have to take it. I’m hoping, that a speech that goes today, takes into account everything. And last night to me was a blow. In favor of what these so called dissidents might be saying.”

Cramer has extensively discussed KB Home (NYSE:KBH) in his previous appearances. In a March show, he outlined:

“The home builder has inflation issues and has mortgage issues, right? Rates are too high. The stock’s down from just under $90 to around $60. So you could say those are now baked into the stock price but some investors thought the same way about Lennar, another national home builder. They reported an upside surprise on earnings but talked about how housing prices are going down albeit slowly, but that was certainly enough to kill that stock.

An elevated view of a suburban neighborhood of newly built attached single-family residential homes.

So I don’t see a bottom in KB Home, especially when it was trading at $42 in the fall of 2023. The stock’s had a relentless run. Time to bide your time, wait for a better moment. For the record, if you insist on owning a home builder, do you mind if you just go with Toll Brothers? I think that’s best of breed. Lennar did shake off more than half its losses by day’s end, closing at $115, that’s only down five. I saw it at one point down 12. Lurking behind all the negativity here is the likelihood, yes, of a recession, recession aided by stagflation.”

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Disclosure: None. This article is originally published at Insider Monkey.