Lennar Corporation: A Mixed Bag Amid Market Gains
With a market capitalization of $45.6 billion, Lennar Corporation (LEN), based in Miami, Florida, stands as a prominent name in the U.S. homebuilding industry, focusing on both single-family and multifamily residential constructions. Their operations extend beyond building homes to financial services and fund investments, attracting various buyers, including first-time homeowners, those looking to upgrade, active adults, and luxury buyers.
52-Week Performance Overview
Over the past year, Lennar’s stock has generally performed well, increasing by 33.1%. This is better than the broader S&P 500 Index ($SPX), which saw a 30.9% rise in the same period. However, in 2024, LEN’s shares have gained only 13.8%, falling short of the SPX’s impressive 25.1% year-to-date growth.
Comparative Analysis with Sector Performance
Examining more closely, Lennar’s performance exceeds that of the Consumer Discretionary Select Sector SPDR Fund (XLY), which achieved a 28.8% return in the last 52 weeks.
Q3 Results and Market Reaction
Despite reporting a strong Q3 on September 19, with an adjusted EPS of $3.90 and revenue of $9.4 billion, Lennar’s stock dropped by 5.3% the following day. This decline was attributed to a significant drop in home sales gross margin by 190 basis points, which did not meet investor forecasts. Furthermore, the company’s outlook for Q4 was not reassuring, projecting home deliveries between 22,500 to 23,000 units and an average selling price (ASP) around $425,000. Concerns also arose regarding the anticipated fall in Financial Services earnings to around $140 million.
Future Earnings Projections
For the current fiscal year, ending in November, analysts predict a slight year-over-year decline in EPS for LEN, projected at $14.18. Nevertheless, the company’s recent earnings history remains promising, having exceeded consensus estimates in the last four quarters.
Analyst Ratings Snapshot
A total of 19 analysts provide insights on Lennar, with a consensus rating indicating a “Moderate Buy.” This includes eight “Strong Buy” ratings, one “Moderate Buy,” nine “Holds,” and one “Strong Sell.”
Updated Price Target Insights
On November 21, Rafe Jadrosich, an analyst at Bank of America Securities, reiterated a “Hold” rating for Lennar, maintaining a price target of $190.
Current Stock Valuation
At present, LEN is trading below the average price target of $199.36. The highest price target on the street is $236, suggesting a potential upside of 40.4% from current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
