Lennar (NYSE:LEN) Stock Price Up 6.6% – Should You Buy?

Lennar Corporation (NYSE:LEN) was up 6.6% during trading on Thursday. The stock traded as high as $82.30 and last traded at $82.7920. 2,025,010 shares were traded during mid-day trading, a decline of 38% from the average session volume of 3,257,680 shares. The stock had previously closed at $77.70.

Key Headlines Impacting Lennar

Here are the key news stories impacting Lennar this week:

• Positive Sentiment: Lower rates lift the homebuilder sector: The average 30-year mortgage rate declined to 7.32%, while Treasury yields also eased. The improved financing outlook encouraged investors to rotate back into beaten-down homebuilders, including Lennar. Lennar gains as lower rates appear to lift beaten-down homebuilders
• Positive Sentiment: Institutional buying and valuation appeal: Berkshire Hathaway and other large institutions reportedly increased their Lennar holdings in the latest quarter. A GuruFocus analysis also estimated fair value at $124.32 versus a recent share price of $84.45, potentially reinforcing the view that LEN is undervalued. A Look at Lennar Corp After 8.7% Gain
• Positive Sentiment: Continued community expansion: Lennar broke ground on a 220-home community at Fort Monmouth in Eatontown, New Jersey, and was identified as the buyer of the former Boynton Beach Mall site in Florida. These projects expand its future housing pipeline, although their earnings impact will develop over time. Lennar breaks ground on 220-home community at Fort Monmouth Lennar revealed as buyer of Boynton Beach Mall
• Neutral Sentiment: Broader real-estate rally: Lennar rose alongside Zillow and CoStar as analysts raised targets for parts of the real-estate sector, suggesting some of the move reflected industry-wide momentum rather than a Lennar-specific catalyst. CoStar Soars as Zillow and Lennar Rally
• Negative Sentiment: Fundamental concerns remain: Lennar’s latest reported quarter missed earnings and revenue expectations, with earnings per share falling year over year and revenue declining 8.7%. Earlier weakness also reflected a reduced delivery outlook, leaving the stock sensitive to mortgage rates, affordability and execution risks. Lennar Stock Sinks as Market Gains

Wall Street Analyst Weigh In

A number of brokerages have commented on LEN. Truist Financial decreased their target price on Lennar from $80.00 to $75.00 and set a “hold” rating for the company in a research note on Wednesday, September 16th. Morgan Stanley started coverage on Lennar in a research note on Thursday, October 1st. They set an “underweight” rating and a $65.00 price objective for the company. Seaport Research Partners dropped their target price on Lennar from $74.00 to $70.00 and set a “sell” rating on the stock in a research report on Monday, September 21st. Keefe, Bruyette & Woods cut their target price on Lennar from $85.00 to $75.00 and set an “underperform” rating on the stock in a research note on Tuesday, September 22nd. Finally, Citigroup reduced their price target on shares of Lennar from $88.00 to $85.00 and set a “neutral” rating for the company in a report on Monday, September 21st. One equities research analyst has rated the stock with a Buy rating, seven have assigned a Hold rating and eleven have issued a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of “Strong Sell” and a consensus price target of $79.00.

Lennar Price Performance

The company has a market capitalization of $20.24 billion, a P/E ratio of 16.08, a P/E/G ratio of 3.17 and a beta of 1.36. The business’s 50-day simple moving average is $81.17 and its 200 day simple moving average is $85.67. The company has a current ratio of 4.94, a quick ratio of 0.69 and a debt-to-equity ratio of 0.20.

Lennar (NYSE:LEN) last issued its quarterly earnings results on Wednesday, September 16th. The construction company reported $1.23 earnings per share for the quarter, missing analysts’ consensus estimates of $1.29 by ($0.06). Lennar had a return on equity of 6.15% and a net margin of 4.09%. The company had revenue of $8.05 billion during the quarter, compared to analyst estimates of $8.32 billion. During the same period in the prior year, the company posted $2.00 earnings per share. The company’s revenue was down 8.7% on a year-over-year basis. As a group, sell-side analysts anticipate that Lennar Corporation will post 4.88 EPS for the current year.

Lennar Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Thursday, October 22nd. Shareholders of record on Wednesday, October 7th were paid a dividend of $0.50 per share. This represents a $2.00 dividend on an annualized basis and a yield of 2.4%. The ex-dividend date of this dividend was Wednesday, October 7th. Lennar’s dividend payout ratio (DPR) is presently 37.81%.

Insider Activity

In other news, major shareholder Berkshire Hathaway Inc acquired 1,708,095 shares of the company’s stock in a transaction dated Friday, October 2nd. The shares were bought at an average price of $79.44 per share, with a total value of $135,691,066.80. Following the purchase, the insider owned 28,438,045 shares of the company’s stock, valued at approximately $2,259,118,294.80. This represents a 6.39% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. In the last 90 days, insiders acquired 7,502,276 shares of company stock worth $595,303,287. 10.05% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Large investors have recently bought and sold shares of the company. Concurrent Investment Advisors LLC lifted its holdings in shares of Lennar by 77.1% in the second quarter. Concurrent Investment Advisors LLC now owns 89,178 shares of the construction company’s stock valued at $8,070,000 after purchasing an additional 38,822 shares in the last quarter. Nykredit A S purchased a new position in shares of Lennar during the second quarter valued at $5,295,000. Nan Shan Life Insurance Co. Ltd. grew its holdings in shares of Lennar by 6,292.5% during the second quarter. Nan Shan Life Insurance Co. Ltd. now owns 328,000 shares of the construction company’s stock valued at $29,681,000 after buying an additional 322,869 shares in the last quarter. Corient Private Wealth LP grew its holdings in shares of Lennar by 24.7% during the second quarter. Corient Private Wealth LP now owns 82,261 shares of the construction company’s stock valued at $7,444,000 after buying an additional 16,299 shares in the last quarter. Finally, Redwood Investment Management LLC acquired a new position in Lennar during the first quarter valued at $1,028,000. Institutional investors own 81.10% of the company’s stock.

Lennar Company Profile

Lennar Corporation (NYSE:LEN) is a homebuilding and real estate company that develops, constructs, and sells primarily single-family homes. The company offers homes across a range of price points and designs, including residences for first-time, move-up, luxury, and active-adult buyers. Its operations also include land acquisition and development, allowing Lennar to prepare communities and lots for residential construction.

In addition to homebuilding, Lennar develops multifamily rental properties and provides related financial services.