Quick Update for Lennar (LEN) Investors

Lennar Corporation (LEN)

During the last year, Lennar returned a positive performance of 53.6%, with a high of $156.01 and a low of $94.11. Over the same period, the stock outpaced the S&P 500 index by 33.8%. The company's 50-day average price was $136.23 per share as of January 2024. Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. The large-cap Consumer Discretionary company is based in Miami, FL. Lennar has provided a 1.0% dividend yield over the last 12 months.

Good EPS Growth and Positive Cash Flows:

2018 2019 2020 2021 2022 2023
Revenue (M) $20,572 $22,260 $22,489 $27,131 $33,671 $34,200
Operating Margins 12% 12% 14% 21% 18% 15%
Net Margins 8% 8% 11% 16% 14% 11%
Net Income (M) $1,696 $1,849 $2,465 $4,430 $4,614 $3,900
Diluted Shares (M) 309 318 309 307 290 283
Earnings Per Share $5.44 $5.74 $7.85 $14.27 $15.72 $13.45
EPS Growth n/a 5.51% 36.76% 81.78% 10.16% -14.44%
Avg. Price $50.13 $49.72 $63.24 $96.2 $82.16 $99.0
P/E Ratio 9.18 8.63 8.03 6.74 5.22 7.37
FCF (M) $1,561 $1,396 $4,118 $2,468 $3,208 $5,221
CAPEX (M) $130 $86 $73 $65 $57 $83

Lennar's Earnings and Assets May Be Undervalued:

Lennar has a trailing twelve month P/E ratio of 11.1, compared to an average of 22.96 for the Consumer Discretionary sector. Based on its EPS guidance of $16.15, the company has a forward P/E ratio of 8.4. The compound average growth rate of the company's historical and projected earnings per share is 16.8%. On this basis, the company's PEG ratio is 0.59. Alternatively, we can use the weighted average of Lennar and the broader market's estimated 5-year EPS growth rate. This normalized growth rate of 9.9% gives us a PEG ratio of 1.01, which shows that Lennar is fairly priced. Furthermore, the market is potentially undervaluing Lennar in terms of its book value because its P/B ratio is 1.6. In comparison, the sector average P/B ratio is 4.24. The company's shares are currently -8.4% below their Graham number.

Analysts Give Lennar an Average Rating of Buy:

There are 19 analysts covering Lennar, with target prices ranging from $122.0 to $190.0 per share, for an average of $160.95. As of January 2024, the company is trading -15.4% away from its average target price, implying there is an analyst consensus of some upside potential. On average, analysts recommend to buy Lennar.

At 2.6%, Lennar has an average amount of shares sold short. Institutions own 93.8% of the company's shares, and it has a large amount of insider shareholders because 2.39% are owned by corporate insiders. Overall, the company's top shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $4,200,952,308.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.