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.
