Investing.com - KB Home plunged Thursday, deepening the rout in homebuilders, after slashing its full-year guidance in the wake of an ongoing slump in the housing market.
KB Home (NYSE:KBH) dropped 19% to remain on track for its worst day of trading since August 1992 after its lower-than-expected fourth-quarter guidance prompted a wave of price target cuts from Wall Street banks.
Credit Suisse, Wells Fargo, Barclays and Wedbush all slashed their price targets on KB Home stock.
KB Home lowered its fourth-quarter revenue guidance to a range of $1.31 billion to $1.34 billion from $1.39 billion to $1.45 billion previously, below consensus of $1.42 billion, according to S&P Capital IQ.
The homebuilder blamed the downbeat outlook on higher mortgage rates and higher home prices, both of which have forced homebuyers to remain on the sidelines.
The bleeding from KB Home spilled across homebuilders and served as warning that there's more road for further downside in the sector.
DR Horton (NYSE:DHI), which just a week ago peddled a similar downbeat narrative about future growth, fell for second-straight day as selling intensified. Its shares fell 5%, taking losses for the year to 27%.
Lennar (NYSE:LEN) fell 7% to a more than 2-1/2 year low.
In the midst of the selloff in homebuilders, some continued to express confidence over the longer-term factors supporting the housing market, including solid consumer confidence, high employment, growing wages and increasing household formation.
The SPDR S&P Homebuilders (NYSE:XHB) was down more than 2%.