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Research Alert: CFRA Keeps Hold Opinion On Shares Of Lennar Corporation
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Research Alert: CFRA Keeps Hold Opinion On Shares Of Lennar Corporation
Jun 18, 2024 12:28 PM

03:10 PM EDT, 06/18/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

Our 12-month target of $170, down $4, is 10.5x our FY 25 EPS view of $16.16 (down $0.43; FY 24 EPS down $0.40 to $14.82) is a premium to the 10-year forward P/E average of 10.3x. FQ2 EPS of $3.48 (+15% Y/Y) beat by $0.26 on revenue of $8.78B (+9% Y/Y), $200M above consensus. Deliveries of 19.7K units (+15% Y/Y) was offset by an average selling price (ASP) decline of 5%. Demand was challenged by affordability headwinds, but consumers responded favorably to incentives. Homebuilding gross margin ticked in at 22.6% (+10 bps Y/Y) with incentives representing 9.4% of revenue. Order value grew to $21.3B (+19% volume, -5.4% ASP) and backlog was $8.2B (-12% volume, -2% ASP). The Q3 delivery guide targets 20.8K units at ASP of $423K (midpoints). LEN sees a path to 80K deliveries for the year, but pressure is on to deliver them at flat gross margins Y/Y, with an implied 25% gross margin requirement in Q4. We see Q/Q ASP increases adding credibility to the margin thesis and still see LEN benefiting from scale vs. peers.

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