KB Home shares fell 18 percent on Thursday, headed for its worst day of trading since August 1992.
The Los Angeles-based homebuilding company provided lower than expected guidance for its fourth quarter results. Credit Suisse, Wells Fargo, Barclays and Wedbush all slashed their price targets on KB Home stock. Bank of America Merrill Lynch both cut its rating to neutral from buy and its price target to $24 a share from $26 a share.
“We believe our housing revenues for the fourth quarter will be in the range of $1.31 to $1.34 billion, lower relative to prior guidance” of $1.39 billion to $1.45 billion, KB Home CEO Jeff Mezger said on a conference call. Wall Street previously expected KB Home to report revenue of $1.43 billion in the fourth quarter, according to a FactSet survey.
The lowered guidance was “due to an expected negative impact on our central region deliveries from the historic range experienced in Texas, fewer than anticipated spec sales and deliveries, and potential delayed closings over the next couple of weeks in California due to impacts from the recent large wildfires,” Mezger added.
KB Home traded as low as $16.91 a share on Thursday.