Group 1 - Lennar Corporation (NYSE:LEN) is recognized as one of the 13 Safest Stocks to Invest in Now, driven by significant hedge fund interest and a solid return on equity [1] - Keefe, Bruyette & Woods has reiterated its Market Perform rating and set a price target of $125 for Lennar Corporation, citing anticipated delivery losses of 11% and 3.5%, along with a 4% reduction in its 2026 projection and an 18% decrease in its Q4 2025 EPS estimate [2][3] - The company has lowered its full-year delivery guidance by 5-6% due to affordability constraints and unstable economic conditions affecting housing demand, with an anticipated return on equity of 12-13% reflected in the price target [3] Group 2 - Lennar Corporation develops residential land, designs, constructs, and sells single-family and multi-family homes, and manages rental properties for various customer segments, including luxury, first-time, and move-up buyers [4]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _______ To _______ Commission File Number: 1-11749 Lennar Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...

Core Viewpoint - Warren Buffett's significant investment in Lennar highlights the importance of shareholder yield as a key metric for investors [2][5][7] Shareholder Yield - Shareholder yield measures total cash returned to shareholders as a percentage of market cap, including dividends, stock buybacks, and debt reduction [3] - Lennar's shareholder yield is calculated by combining its dividend yield of 1.6% and an estimated stock buyback yield of 7.1%, resulting in a total shareholder yield of 8.7% [6][7] Company Performance - Lennar paid a dividend of $0.50 per share in Q3 2025, leading to an annualized dividend payout of $2 per share [5] - The company repurchased 4.1 million shares for $507 million in Q3 2025 and is projected to spend approximately $2.4 billion on stock buybacks in the current fiscal year [6] Market Conditions - Lennar's fiscal Q3 revenue from home sales fell 9% year over year, attributed to lower average sales prices and a decrease in gross margins from 22.5% to 17.5% [10] - The average 30-year fixed-rate mortgage rate has recently dropped to a three-year low, which could improve home affordability and benefit Lennar [11] Long-term Prospects - The U.S. housing market faces a shortage, with an estimated need for over 4.7 million new homes, positioning Lennar favorably as one of the largest homebuilders [12]

Market Overview - U.S. stocks closed higher on Friday, with the Dow Jones index gaining approximately 300 points following the release of inflation data [1] - Major indices experienced losses last week, with the Nasdaq Composite declining by 0.7%, the S&P 500 down by 0.3%, and the Dow falling by 0.2% [1] Analyst Insights - Wall Street analysts frequently update stock picks, but their track records in predicting market movements can be inconsistent, leading to confusion among investors [2] - Benzinga's Analyst Ratings API compiles high-quality stock ratings through partnerships with major sell-side banks, providing insights that can serve as trading indicators for outperforming the stock market [3] Top Analyst Picks - Benzinga provides access to the latest analyst ratings, allowing traders to sort by analyst accuracy [4] - JMP Securities maintains a Market Outperform rating on CrowdStrike Holdings, increasing the price target from $500 to $550, indicating a potential upside of around 14% [5] - Citigroup maintains a Buy rating on TE Connectivity, raising the price target from $230 to $250, suggesting a potential upside of about 15% [5] - Piper Sandler reiterates an Overweight rating on Robinhood Markets, increasing the price target from $120 to $140, with an expected surge of around 15% [5] - Stifel maintains a Buy rating on Ciena Corporation, raising the price target from $120 to $152, anticipating a gain of approximately 7% [5] - Wedbush reiterates a Neutral rating on Lennar Corporation with a price target of $130, expecting a 3% gain [7]

Over the summer, many of the home builders started rallying in anticipation of rate cuts from the Fed. But now the Feds start cutting and the group keeps rolling over. So what's going on here.Didn't we want rate cuts to jolt the industry out of the doldrums. Well, let's look at what happened when some of the key home builders recently reported. First, we got Lenar, the Miami based developer that's become one of the largest home builders in the country.Lenar kicked these off last Thursday when they reported ...

Core Viewpoint - The recent performance of major home builders, particularly Lenar and KB Home, indicates that despite expectations of improved market conditions due to anticipated rate cuts from the Federal Reserve, actual sales and financial results have not met investor hopes, leading to a cautious outlook for the housing market. Group 1: Lenar's Performance - Lenar reported weaker than expected revenue and lower deliveries, with average selling prices only meeting expectations, resulting in a housing gross margin of 17.5%, which is 30 basis points lower than anticipated and 500 basis points lower than the previous year [3][4] - The company acknowledged continued softening of market conditions and affordability, with third quarter results reflecting these challenges [2][3] - Lenar's management indicated that while they delivered more units than expected, it required additional incentives that negatively impacted gross margins, and they expect current quarter earnings to fall below expectations [4][5] Group 2: KB Home's Performance - KB Home reported better than expected sales and average selling prices, but both metrics were still down year-over-year, and the company cut its full-year sales forecast significantly [11][12] - Management expressed a favorable long-term outlook for housing driven by demographics and a shortage of homes, but noted that short-term demand has not significantly increased despite lower mortgage rates [13][17] - The decline in mortgage rates has added approximately $30,000 of purchasing power for customers based on KB Home's average selling price, which is particularly beneficial for first-time home buyers [14][15] Group 3: Market Outlook - Both Lenar and KB Home emphasized the need for lower mortgage rates to stimulate sales, with management from both companies sounding optimistic about the potential for rates to decrease further [20] - Despite the Fed's recent rate cuts, long-term interest rates have been rising, raising concerns about a repeat of last year's market conditions where rate cuts did not lead to improved sales [10][20] - The overall sentiment from both companies suggests that while there are early signs of increased customer interest, a significant uptick in sales has yet to materialize, leading to a cautious approach in the housing market [6][19]

Market Sentiment & Expectations - The market anticipated an improved housing environment due to expected rate cuts from the Federal Reserve [1][2] - However, Lennar tempered these expectations by reporting continued softening of market conditions and affordability [2] Financial Performance - Lennar posted weaker than expected revenue with lower than expected deliveries [3] - Housing gross margin was 175%, 30 basis points lower than anticipated and 500 basis points lower than the year before [3] - Lennar's earnings for the current quarter are likely to come in below expectations [3] Pricing & Incentives - Lennar used additional incentives to attract buyers, which negatively impacted the gross margin [4] - Lennar aims to be less promotional going forward [4]

Group 1 - The anticipation of rate cuts from the Fed initially led to a rally among home builders, but the expected positive impact on the housing market has not materialized as hoped [1] - Lenar, a major home builder, reported third-quarter results that indicated continued softening in market conditions and affordability, contradicting investor expectations for improvement [2][3] - Lenar's revenue was weaker than expected, with lower deliveries and average selling prices that only met expectations, resulting in a housing gross margin of 17.5%, which is 30 basis points lower than anticipated and 500 basis points lower than the previous year [3] Group 2 - Despite delivering more units than expected, Lenar had to offer additional incentives to boost sales, which negatively impacted their gross margin [4] - The company aims to reduce promotional activities in the future, but there is uncertainty about whether this goal can be achieved [4]

Core Insights - The Federal Reserve's recent rate cuts may not effectively lower mortgage rates, raising concerns for homebuilders [1] - Lennar reported disappointing quarterly earnings, with management indicating that lower mortgage rates have not yet led to increased sales [2] - KB Home's performance was slightly better, but the company also cut its full-year forecast and noted a lack of order increases despite changing mortgage rates [3] Group 1: Federal Reserve Impact - The Fed's 0.25% rate cut did not lead to a decline in longer-term yields, including mortgage rates, which actually rose [1] - There is skepticism about whether the Fed's actions will positively impact the housing market, as seen in previous instances where rate cuts did not yield expected results [1] Group 2: Company Performance - Lennar's quarterly earnings were soft, with management lowering earnings estimates and indicating that sales incentives negatively impacted margins [2] - KB Home's report showed some key metrics better than expected, but the company significantly reduced its full-year forecast [3] - Both companies expressed optimism about future rate reductions and improved business conditions, but current sales volumes have not increased meaningfully due to mortgage rates [4]

Market Performance - U.S. equity markets experienced a subdued performance on September 24, 2025, following a pullback after a three-day record high streak, driven by profit-taking and concerns over inflation and interest rates [1][2][10] - The Dow Jones Industrial Average (DJIA) fell 0.2% to close at 46,292.78, the Nasdaq Composite (IXIC) dropped 1% to finish at 22,573.47, and the S&P 500 (SPX) declined 0.6% to settle at 6,656.92 [2] - On September 24, major indexes continued to decline, with the Nasdaq down approximately 0.4% and both the S&P 500 and DJIA declining around 0.3% [3] Sector Performance - Sector performance was mixed, with the Energy Select Sector SPDR (XLE) advancing 1.7%, while Consumer Discretionary Select Sector SPDR (XLY) and Technology Select Sector SPDR (XLK) both fell 0.9% on September 23 [4] - On September 24, the S&P 500 Materials sector was the worst performer, down 1.5%, and technology shares underperformed the broader market by falling 0.6% [4] Key Market Drivers - Federal Reserve Chair Jerome Powell's cautionary remarks regarding asset prices being "fairly highly valued" influenced market sentiment, leading to profit-taking [5] - Powell indicated a cautious approach to future rate cuts, balancing inflation risks and employment risks, with investors anticipating potentially two more rate cuts this year [5] Upcoming Market Events - Investors are awaiting the release of the Personal Consumption Expenditures (PCE) index on September 26, 2025, with expectations of a 0.25% monthly rise for August and an annual increase of 3% [6] - The U.S. Department of Labor's monthly report for September, including non-agricultural jobs and unemployment rate data, is due on October 3, 2025 [7] Major Stock News - Nvidia (NVDA) shares dropped about 2.8% due to concerns over its $100 billion deal with OpenAI, contributing to the tech sector's underperformance [13] - Micron Technology (MU) reported strong fiscal fourth-quarter results but saw a 4% decline in shares on September 24 after a significant year-to-date gain [13] - Intel (INTC) shares surged approximately 5.5% following a $5 billion investment from Nvidia and a favorable forecast for expense reductions [13] - Lithium Americas (LAC) shares nearly doubled, rising between 87.6% and 91.5%, after reports of potential U.S. government investment in its lithium project [13] - Alibaba (BABA) stock rallied after announcing plans to increase AI spending beyond $50 billion [13] - Freeport-McMoRan (FCX) experienced a significant decline of 10.6% after revising third-quarter sales forecasts downward for copper and gold [13] - Homebuilders like Lennar (LEN), PulteGroup (PHM), and D.R. Horton (DHI) saw stock increases following stronger-than-expected U.S. new home sales in August [13]