Homebuilder Lennar (NYSE:LEN) edged up in premarket trading overnight, after a volatile day of trading yesterday. The slide continued briefly into this morning's trading session as well but didn't take long to reverse and head substantially upward. The company turned in its earnings report, and delivered beats for both earnings and revenue, but was hit by some familiar troubles in its future analysis. The future may have some drawbacks, but the overall word from financial analysts is still quite enthusiastic and has been for the last few months now.
The Lennar Earnings Report Poses Mostly Good News
Lennar delivered beats in both earnings and revenue, a positive outcome by any measure. The company brought in earnings of $2.95 per share against an Investing.com consensus of $2.37 per share and a Zacks consensus of $2.36. The company's latest earnings figure also destroys the report from this time last year, in which the company brought in $1.65 per share.
Revenue, meanwhile, was likewise a beat. The company turned in revenue of $6.43 billion for the quarter, against analyst expectations calling for $6.21 billion. Quarterly revenue was also up against this time last year and by a much wider margin than earnings; quarterly revenue was up 21.6% against last year's figures, reports noted.
Lennar further noted that its previously-established plans to spin off certain businesses, including its tech investments, will be expanded. The original figures released last quarter called for a spinoff, valued between $3 billion and $5 billion, which has been since increased to between $5 billion and $6 billion.
Stuart Miller, the company's executive chairman, released a statement along with the report, noting that the housing market throughout the United States in the second quarter remained “very strong,” despite a slight uptick in interest rates. Miller pointed to the combined factors of strong personal savings rates during the pandemic, government stimulus, and a “developing return to normalcy” kept the housing market going.
However, there was also a downside to be pointed out. Lennar is having troubles familiar to homebuilders as well as many other fields: materials shortages and labor shortages. These points could have an impact on future sales. Despite these issues, a lack of homes available for sale anywhere in the United States is helping to drive Lennar's profit margins upward aggressively.
What Does Lennar Stock Analysis Look Like Today?
Currently, the Lennar stock forecast looks bright, as expressed by our latest research into the financial analyst field. Lennar stock has had a consensus “buy” rating for the last three months, as the company shifted to a consensus “buy” from the previous rating of “hold”.
The field has been largely split between “buy” and “hold” for much of the last year. A year ago, Lennar had nine “buy” ratings and 10 “hold” ratings to its credit. Six months ago, that shifted to nine “buy” and 11 “hold”. By May, however, that had shifted to 10 “buy” and nine “hold”, and today it stands evenly at nine “buy” and nine “hold” ratings.
The price target, meanwhile, offers a fairly narrow range. The current consensus price target on Lennar homes stock is $100.12, with a high of $120.00 and a low of $77. Given that Lennar stock is currently trading at $93.29, there is still some upside potential on hand with this stock.
Recent activity has been fairly light. In fact, for most of this quarter, the major shifts in perception came back in March, when six separate analysts increased their price targets on the company, and one analyst, Wolfe Research, initiated coverage of the company with an “outperform” rating. Only two events happened since then in the analyst pool; Wells Fargo initiated coverage of the company with an “equal weight” rating and a $112 price target, and just three days ago, Wedbush reiterated its “outperform” rating on the company but established no price target.
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