Miami, Florida-based Lennar Corporation (LEN) operates as a homebuilder in the U.S. With a market cap of $46.1 billion, Lennar operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The homebuilder is expected to release its Q4 earnings for 2024 on Thursday Dec. 12.
Ahead of the event, analysts expect Lennar to report a profit of $4.22 per share, down 18.4% from $5.17 per share reported in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in each of the past four quarters. Its adjusted EPS for the last reported quarter dipped marginally to $3.90, while exceeding the consensus estimates by 7.7%.
For fiscal 2024, analysts expect Lennar to report an adjusted EPS of $14.18, down marginally from $14.25 in fiscal 2023. However, in fiscal 2025 its adjusted EPS is expected to grow 13.1% year-over-year, reaching $16.04.
LEN stock is up 14.1% in 2024, lagging behind the S&P 500 Index’s ($SPX) 22.3% gains but outpacing the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 12% returns on a YTD basis.
Despite reporting better-than-expected results, Lennar’s stock prices plunged 5.3% in the trading session after the release of its Q3 earnings on Sept. 19. The company reported a robust 7.9% year-over-year growth in total revenues, reaching $9.4 billion, primarily driven by an 8.7% surge in homebuilding revenues to $9 billion. Despite the robust growth in topline Lennar’s operating income grew by a modest 4.1% to $1.5 billion, due to the operating margin contraction of 59 basis points to 16.3%.
Although the company beat analysts' topline and earnings estimates, it failed to match Wall Street's guidance expectations. Moreover, Lennar has observed a drastic drop in backlogs from 21,321 homes with a dollar value of $9.9 billion in the year-ago quarter to 16,944 homes with a dollar value of $7.7 billion in the previous quarter. It has also experienced a notable drop in the rate of delivery growth from 8% in the year-ago quarter to 5% in Q3 2024. These updates likely unsettled investors' confidence in the stock.
The consensus opinion on LEN stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 19 analysts covering the stock, eight recommend a “Strong Buy,” one advises a “Moderate Buy,” nine suggest a “Hold,” and one gives a “Strong Sell” rating. The mean price target of $199.98 represents a potential upside of 17.6% from current price levels.
On the date of publication, Aditya Sarawgi 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.
