Lennar (LEN, Financial) has been downgraded by Zelman from an 'Outperform' rating to 'Neutral'. Alongside the downgrade, a new price target of $112.50 has been set for the company. This adjustment reflects changes in the company's outlook as assessed by the analysts.
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 $138.16 with a high estimate of $216.00 and a low estimate of $95.00. The average target implies an upside of 32.07% from the current price of $104.61. 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 $130.41, suggesting a upside of 24.66% from the current price of $104.61. 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: June 17, 2025
- Revenue: Not explicitly mentioned in the transcript.
- Gross Margin: 18%, excluding purchase accounting.
- Net Margin: 9.2%, excluding purchase accounting.
- Average Sales Price: $389,000.
- Sales Incentives: 13.3% of sales.
- SG&A: 8.8% of revenue.
- Homes Delivered: Over 20,000 homes.
- Homes Sold: 22,601 homes.
- Community Count: 1,617 communities.
- Financial Services Operating Earnings: $157 million.
- Cash and Total Liquidity: $1.2 billion in cash and $5.4 billion in total liquidity.
- Debt to Total Capital: 11%.
- Book Value Per Share: Approximately $87.
- Q3 Guidance - Deliveries: 22,000 to 23,000 homes.
- Q3 Guidance - Average Sales Price: $380,000 to $385,000.
- Q3 Guidance - Gross Margin: Approximately 18%.
- Q3 Guidance - SG&A: 8% to 8.2%.
- Q3 Guidance - EPS: Approximately $2 to $2.20 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lennar Corp (LEN, Financial) maintained a strong focus on driving volume and growth, which helped them manage production and sales pace effectively.
- The company has been successful in reducing construction costs, with a 3.5% year-over-year decrease, reaching the lowest direct construction costs since Q3 of 2021.
- Lennar Corp (LEN) is investing heavily in technology to enhance productivity and efficiency, which is expected to bring significant long-term returns.
- The company has improved its inventory turn to 1.8 times, a 13% improvement from the previous year, indicating better capital and production efficiencies.
- Lennar Corp (LEN) has a strong balance sheet with $1.2 billion in cash and $5.4 billion in total liquidity, providing financial flexibility for future growth.
Negative Points
- The housing market remains challenging with higher interest rates and declining consumer confidence impacting demand.
- Lennar Corp (LEN) experienced a reduction in gross margin to 18% due to increased sales incentives and a lower average sales price.
- The company is facing pressures from higher land and development costs, which are impacting overall profitability.
- SG&A expenses have increased due to investments in technology and lower revenue leverage, affecting overall margins.
- The market conditions have led to a softening in sales pace, particularly in markets like Seattle, Portland, and Northern California, where higher home prices and macroeconomic factors are impacting demand.
