Buckingham analyst Megan McGrath tells investors in a research note that she remains "constructive" on both Lennar (LEN) and KB Home (KBH) ahead of the companies' earnings report next week, saying she expects both companies to continue to point to improvements in demand trends through the quarter and an easing of incentives vs. Q1 levels. The analyst, who maintains a Buy rating and $56 price target on Lennar and a Neutral rating and $27 price target on KB Home, says she currently prefers Lennar's more diverse regional exposure andfaster absorption pace for a one-year outlook to KB Home's high California exposure and higher debt levels.

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