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With a market cap of $32.9 billion, Lennar Corporation (LEN) is a leading homebuilder in the United States, specializing in the construction and sale of single-family and multifamily homes. It operates through multiple segments, including Homebuilding, Financial Services, Multifamily, and Fund Investments, catering to a diverse range of homebuyers. Lennar also provides mortgage financing, title, and insurance services to support its real estate operations.
Shares of the homebuilder have underperformed the broader market over the past 52 weeks. LEN has decreased 19.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 22.3%. Moreover, shares of LEN are down 9.2% on a YTD basis, compared to SPX’s nearly 4% gain.
Focusing more closely, the Miami, Florida-based company has lagged behind the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 27.5% return over the past 52 weeks and a 1.2% YTD gain.
Shares of LEN dropped 5.2% following its Q4 2024 earnings release on Dec. 18. The company's adjusted EPS of $4.03 missed the consensus estimate, while total revenue of around $10 billion lagged expectations and declined 9.3% year over year. Homebuilding revenues fell 9.2% to $9.6 billion, with new orders dropping 2.7% to 16,895 homes and backlog declining 21.9% to 11,633 homes, highlighting demand weakness amid high mortgage rates. Additionally, Lennar's guidance for fiscal Q1 2025 projected lower gross margins and higher SG&A expenses, further dampening investor sentiment.
For the current fiscal year, ending in November 2025, analysts expect LEN’s EPS to decline nearly 10% year-over-year to $12.48. The company's earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 19 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, one “Moderate Buy,” and 13 “Holds.”
This configuration is less bullish than three months ago, with eight “Strong Buy” ratings on the stock.
On Feb. 7, RBC Capital analyst Mike Dahl lowered Lennar’s price target to $125 while maintaining a “Sector Perform" rating, citing balance sheet and cash flow impacts from the 80% Millrose equity spin-off and Rausch Coleman transaction.
As of writing, LEN is trading below the mean price target of $154.27. The Street-high price target of $184.75 implies a potential upside of 49.2% from the current price levels.
