Lennar Stock Falls On Soft Deliveries Outlook: What To Know

Core Viewpoint - Lennar's stock declined despite beating analysts' expectations for fiscal Q2 results, primarily due to a soft outlook for home deliveries in fiscal Q3 [1][4]. Financial Performance - Lennar reported a 9% year-over-year increase in revenue to $8.8 billion for the three months ended May 31 [1]. - Home deliveries rose by 15% to 19,690 homes, while new orders increased by 19% to 21,293 homes [1]. - Earnings per share (EPS) grew by 14.6% from the previous year to $3.45, surpassing analysts' expectations of $3.24 [1][3]. Future Outlook - For Q3, Lennar anticipates home deliveries between 20,500 and 21,000, with a midpoint of 20,750, which is below analysts' expectations of 20,917 homes [4]. - The company acknowledged challenges related to affordability and consumer sentiment but noted that purchasers responded positively to increased sales incentives [3]. Market Sentiment - Lennar's stock has underperformed in 2024, with a total return of approximately 5%, compared to the S&P 500's 15% total return [5]. - The average analyst target price for LEN stock is $178.05, indicating an implied upside of nearly 20% from current levels, with a consensus recommendation of "Buy" [6]. - However, some analysts, like those from Wedbush, have an "Underperform" rating with a price target of $144, citing potential challenges from elevated mortgage rates and increased inventory of homes for sale [6].