Spin-Off Research has elevated its rating for Lennar (LEN, Financial) from Hold to Buy, setting a new price target of $121. This upgrade reflects a growing confidence in the company's potential for future growth and performance. Investors looking for resilient and undervalued market opportunities might find Lennar's improved prospects appealing. This strategic move by Spin-Off Research underscores the company's positive outlook on Lennar's capabilities and market position.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Lennar Corp (LEN, Financial) is $142.09 with a high estimate of $216.00 and a low estimate of $110.00. The average target implies an upside of 31.87% from the current price of $107.75. More detailed estimate data can be found on the Lennar Corp (LEN) Forecast page.
Based on the consensus recommendation from 22 brokerage firms, Lennar Corp's (LEN, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Lennar Corp (LEN, Financial) in one year is $130.33, suggesting a upside of 20.96% from the current price of $107.75. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Lennar Corp (LEN) Summary page.
LEN Key Business Developments
Release Date: March 21, 2025
- Average Sales Price: Declined to $408,000, 1% lower than last year.
- Homes Started: 17,651 homes.
- Homes Delivered: 17,834 homes.
- Homes Sold: 18,355 homes.
- Sales Incentives: Increased to approximately 13%.
- Gross Margin: Reduced to 18.7%.
- SG&A: Came in at 8.5%.
- Net Margin: 10.2%.
- Community Count: Increased from 1,447 to 1,584 communities.
- Cash on Book: $2.3 billion.
- Debt-to-Total Capital Ratio: 8.9%.
- Share Repurchase: 5.2 million shares for $703 million.
- Liquidity: Approximately $5.3 billion.
- Homesites Owned: 13,000 homesites.
- Homesites Controlled: 533,000 homesites.
- Inventory Turn: 1.7 times.
- Return on Inventory: Almost 30%.
- Book Value Per Share: About $86.
- Q2 New Orders Guidance: 22,500 to 23,500 homes.
- Q2 Deliveries Guidance: 19,500 to 20,500 homes.
- Q2 Average Sales Price Guidance: $390,000 to $400,000.
- Q2 Gross Margin Guidance: Approximately 18%.
- Q2 SG&A Guidance: 8% to 8.2%.
- Q2 EPS Guidance: Approximately $1.80 to $2 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lennar Corp (LEN, Financial) successfully completed the Moro spin-off and Rausch Coleman acquisition, supporting their transition to an asset-light land-light model.
- The company maintained a strong balance sheet with $2.3 billion in cash and an 8.9% debt-to-total capital ratio.
- Lennar Corp (LEN) achieved a sales pace of 4.1 homes per community per month, aligning with their target and demonstrating operational efficiency.
- Construction costs decreased by 2.5% year-over-year, reaching the lowest level since Q3 2021, indicating effective cost management.
- The company repurchased 5.2 million shares for $703 million, demonstrating a commitment to returning capital to shareholders.
Negative Points
- The macroeconomic environment remains challenging with high mortgage interest rates, impacting housing market demand.
- Lennar Corp (LEN) experienced a decline in average sales price to $408,000, 1% lower than the previous year.
- Sales incentives rose to approximately 13%, significantly impacting gross margins, which fell to 18.7%.
- The company faces ongoing pressure on margins due to the need for incentives to maintain sales volume.
- Consumer confidence and affordability issues continue to limit actionable demand in the housing market.
