Lennar (LEN) Rating Lowered to Sell at Zacks Investment Research
Lennar (NYSE:LEN) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued to investors on Tuesday.
According to Zacks, “Lennar is one of the best-positioned homebuilders to capitalize on the housing recovery, courtesy of the diverse revenue mix, steady top-line performance, above-average order growth and improving SG&A leverage. Moreover, Lennar has agreed to take over CalAtlantic Group in a deal worth $9.3 billion. The combined entity will have a footprint touching approximately 50% of the U.S. population and is expected to generate meaningful cost savings. However, labor shortage along with rising land and labor costs pose a threat to the company’s margins. In the first nine months of fiscal 2017, Lennar’s gross margin on home sales decreased 90 bps year over year, due to an increase in construction and land costs per home. Also, Lennar shares have underperformed its industry so far this year. Earnings estimates for the fourth quarter and the fiscal 2017 have remained stable, in the past 30 days, limiting upside potential for the stock.”
A number of other brokerages have also weighed in on LEN. Royal Bank of Canada reaffirmed a “buy” rating and issued a $64.00 price target on shares of Lennar in a research note on Monday, September 25th. Bank of America raised their price target on shares of Lennar from $63.00 to $65.00 and gave the company a “buy” rating in a research note on Wednesday, October 4th. KeyCorp reaffirmed a “hold” rating on shares of Lennar in a research note on Tuesday, September 26th. MKM Partners raised shares of Lennar from a “neutral” rating to a “buy” rating and set a $64.00 price target on the stock in a research note on Wednesday, October 4th. Finally, Mizuho lowered shares of Lennar from a “buy” rating to a “neutral” rating and decreased their price target for the company from $59.00 to $53.00 in a research note on Tuesday, September 19th. Two analysts have rated the stock with a sell rating, eight have given a hold rating and nine have issued a buy rating to the stock. The stock currently has an average rating of “Hold” and an average price target of $57.93.
Lennar (NYSE:LEN) last posted its earnings results on Tuesday, October 3rd. The construction company reported $1.06 EPS for the quarter, beating the Zacks’ consensus estimate of $1.01 by $0.05. Lennar had a return on equity of 12.37% and a net margin of 6.65%. The firm had revenue of $3.26 billion for the quarter, compared to analysts’ expectations of $3.25 billion. During the same period last year, the firm earned $1.01 EPS. The company’s quarterly revenue was up 15.1% on a year-over-year basis. equities research analysts expect that Lennar will post 4.04 earnings per share for the current year.
In other Lennar news, CFO Bruce E. Gross sold 5,000 shares of the firm’s stock in a transaction that occurred on Tuesday, November 21st. The shares were sold at an average price of $60.00, for a total value of $300,000.00. Following the transaction, the chief financial officer now directly owns 371,043 shares of the company’s stock, valued at approximately $22,262,580. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Company insiders own 12.18% of the company’s stock.
Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Strs Ohio increased its holdings in shares of Lennar by 0.4% during the 2nd quarter. Strs Ohio now owns 18,136 shares of the construction company’s stock worth $967,000 after buying an additional 68 shares during the last quarter. Daiwa Securities Group Inc. increased its holdings in shares of Lennar by 9.7% during the 2nd quarter. Daiwa Securities Group Inc. now owns 6,200 shares of the construction company’s stock worth $331,000 after buying an additional 550 shares during the last quarter. Retirement Systems of Alabama increased its holdings in shares of Lennar by 0.3% during the 2nd quarter. Retirement Systems of Alabama now owns 98,516 shares of the construction company’s stock worth $5,253,000 after buying an additional 297 shares during the last quarter. Global X Management Co. LLC increased its holdings in shares of Lennar by 15.9% during the 2nd quarter. Global X Management Co. LLC now owns 4,924 shares of the construction company’s stock worth $263,000 after buying an additional 674 shares during the last quarter. Finally, Canada Pension Plan Investment Board increased its holdings in shares of Lennar by 84.9% during the 2nd quarter. Canada Pension Plan Investment Board now owns 81,400 shares of the construction company’s stock worth $4,340,000 after buying an additional 37,365 shares during the last quarter. 81.34% of the stock is currently owned by institutional investors and hedge funds.
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Lennar Corporation is a provider of real estate related financial services, commercial real estate, investment management and finance company. The Company is a homebuilder that operates in various states. Its segments include Homebuilding East, Homebuilding Central, Homebuilding West, Lennar Financial Services, Rialto and Lennar Multifamily.
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