Are Wall Street Analysts Bullish on Lennar Stock?
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Valued at a market cap of $45.6 billion, Miami, Florida-based Lennar Corporation (LEN) is a leading U.S. homebuilder specializing in single-family and multifamily residential construction. With operations spanning homebuilding, financial services, and fund investments, it serves diverse buyers, including first-time, move-up, active adult, and luxury homebuyers.
Shares of the homebuilder have outperformed the broader market over the past 52 weeks. LEN has risen 33.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 30.9%. However, in 2024, shares of LEN are up 13.8%, lagging behind SPX’s 25.1% gain on a YTD basis.
Focusing more closely, Lennar has also outpaced the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 28.8% return over the past 52 weeks.
Despite reporting better-than-expected Q3 adjusted EPS of $3.90 and revenue of $9.4 billion on Sep. 19, Lennar's shares fell 5.3% the next day due to a 190-basis-point decline in home sales gross margin, which missed investor expectations. The company also provided weak Q4 guidance, forecasting lower home deliveries of 22,500 units to 23,000 units and a drop in average selling price (ASP) to around $425,000. Additionally, the expected decline in Financial Services operating earnings to around $140 million raised concerns about overall profitability.
For the current fiscal year, ending in November, analysts expect LEN’s EPS to decline marginally year-over-year to $14.18. However, the company's earnings surprise history is promising. It topped the consensus estimates in the last four quarters.
Among the 19 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” nine “Holds,” and one “Strong Sell.”
On Nov. 21, Bank of America Securities analyst Rafe Jadrosich reaffirmed a “Hold” rating on Lennar while maintaining a price target of $190.
As of writing, LEN is trading below the mean price target of $199.36. The Street-high price target of $236, implies a potential upside of 40.4% from the current price 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 is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.