Market Guidance - The company has revised its closing guidance for 2025 down to a midpoint of 12,900 units, a reduction of 100 units from previous estimates, reflecting a choppy market environment [1][2] - Despite the adjustment in closings, the company has maintained its margin guidance without changes [2] Mortgage Applications and Market Conditions - Mortgage applications have decreased for four consecutive weeks, with the 30-year fixed mortgage rate hovering around 6.3% [3] - There is an expectation that the market will eventually respond positively to the easing conditions [3] Affordability and Market Dynamics - The company is focused on delivering homes at prices affordable for first-time buyers, with approximately 70% of its business affected by macroeconomic factors [4] - Current consumer confidence is not at a peak, and resolution of macro-level issues, including political factors and interest rate declines, is anticipated to improve market conditions [5] Industry Relations and Housing Supply - The company is actively engaging with the administration to address housing shortages and improve affordability, emphasizing that builders are eager to increase housing supply [6][7] - There is a recognition of excess inventory in the market, and the company is working to manage this responsibly while collaborating with various stakeholders to tackle the affordability issue [8][9] Inventory Management - The company is addressing mixed messages regarding the number of lots it controls, noting that some land is not yet entitled [10] - The priority remains on moving inventory quickly and responsibly, with a commitment to work with the administration to find solutions for housing affordability [11]

It's time for the big three. We've got three stocks, three charts, and three trades. Rick Ducat, of course, taking us through the charts today.And here to take us through the trades is Don Kaufman, co-founder of Theo Trade. Great to have you both with us. Don, let's kick things off right with this first pick you've got for us today.Lenar in the homebuilder space, heavily under pressure. Although, as I was looking at their chart, they are trying to stage a bit of a rally here. >> Yeah, and that's exactly wha ...

Core Insights - Homebuilding companies like Lennar Corporation and D.R. Horton are facing challenges in the housing market, despite a decrease in mortgage rates over the past year [1][3] - The current 30-year mortgage rate is 6.27%, down from 6.44% a year ago, but remains high, affecting affordability for homebuyers [1] Lennar Corporation - Lennar's market capitalization is approximately $32.1 billion, and it has experienced a decline in average selling price (ASP) of homes delivered, which fell by 6.7% year over year to $393,000 [5][6] - Home sale revenues for Lennar were $23.24 billion, down from $24.28 billion a year ago, indicating ongoing market uncertainties [5] - New orders increased by 6.5% year over year to 63,960, but gross margin fell by 430 basis points to 18% due to lower revenue per square foot and higher land costs [6] - Lennar is implementing strategies such as lowering ASPs and offering price incentives to sustain volume growth, although this has pressured profitability [6][7] - The partnership with Opendoor Technologies through the Trade-Up program is aimed at assisting buyers in purchasing new homes amid high mortgage rates [7] D.R. Horton - D.R. Horton has a market capitalization of approximately $45.8 billion and is actively working to mitigate the impacts of a slow housing market [8][9] - The company has invested $2.2 billion in land and lots to enhance its competitive position and improve capital efficiency [11] - D.R. Horton is offering incentives such as a 3.99% FHA loan to boost customer confidence and drive sales [9][12] - The home sales gross margin for D.R. Horton contracted by 130 basis points to 22.1% due to increased costs and incentive offerings, with expectations for Q4 2025 margins between 21% and 21.5% [12] Stock Performance & Valuation - D.R. Horton's stock performance has outpaced Lennar's over the past six months, and it trades at a discounted valuation compared to Lennar [13][15] - Lennar is trading at a premium valuation with a forward 12-month price-to-earnings (P/E) ratio higher than D.R. Horton [15] - The Zacks Consensus Estimate indicates a 40.5% year-over-year decline in Lennar's fiscal 2025 EPS, while D.R. Horton is expected to see a 17.6% decline [19][20][21] Investment Outlook - Lennar's fundamentals reflect margin compression and revenue declines, leading to a Zacks Rank 5 (Strong Sell) [22] - D.R. Horton, with a Zacks Rank 3 (Hold), shows stronger execution and capital discipline, making it a more attractive investment option amid a constrained housing market [22][23]

Financial Data and Key Metrics Changes - The company generated $140 million of pre-tax income, down 26% from last year's record third quarter results, with a pre-tax income percentage of 12% of revenue and gross margins of 24% [3][4] - Total revenue decreased 1% to $1.1 billion, with an average closing price of $477,000, a 2% decrease from last year's third quarter average closing price of $489,000 [4][10] - Earnings per diluted share decreased to $3.92 from $5.10 last year, with a book value per share of $120, up 15% from a year ago [12][7] Business Line Data and Key Metrics Changes - The company closed a record 2,296 homes in the third quarter, a 1% increase compared to a year ago, but sold 1,908 homes, down 6% from 2023's third quarter [4][10] - The Smart Series, the most affordable line of homes, comprised about 52% of total sales compared to about 50% a year ago [5] - The mortgage and title operations achieved pre-tax income of $16.6 million, an increase of 28% from $12.9 million in 2024's third quarter, with revenue increasing 16% to a record $34.6 million [13][14] Market Data and Key Metrics Changes - New contracts in the northern region decreased by 17%, while new contracts in the southern region increased by 3% compared to last year's third quarter [6] - Deliveries in the southern region increased by 8%, while deliveries in the northern region decreased by 7% from a year ago, with 59% of deliveries coming from the southern region [6] - The company ended the quarter with 233 communities, up 7% from 217 a year ago, with the northern region up 9% and the southern region up 6% [9] Company Strategy and Development Direction - The company remains optimistic about its business, believing the industry will benefit from the undersupply of homes and growing household formations [8] - The company plans to grow its community count by about 5% from 2023, with a strong land position and a total of 50,700 owned and controlled lots, equating to about a five to six-year supply [7][6] - The company is focused on maintaining a strong balance sheet and liquidity while selectively buying back shares [16][51] Management's Comments on Operating Environment and Future Outlook - Management described the current housing market conditions as "just okay," with continued challenges in demand and market conditions [3] - The company is using mortgage rate buy-downs to incentivize sales and drive traffic, which has been a significant factor in the decline of gross margins [4][21] - Management expressed confidence in the strength of their markets, particularly in Columbus, Chicago, Dallas, Minneapolis, and Orlando, expecting strong full-year results in these areas [6][8] Other Important Information - The company ended the quarter with an all-time record $3.1 billion of equity, a debt-to-capital ratio of 18%, and a net debt-to-capital ratio of negative 1% [7][8] - The company spent $115 million on land purchases and $181 million on land development during the third quarter [16] Q&A Session Summary Question: Can you talk about orders and the use of incentives? - Management noted that the market is unpredictable, and they are using selective mortgage rate buy-downs to drive traffic and sales, which has been the primary driver for sales [20][21] Question: Can you comment on gross margin trends in the South? - Management indicated that demand and margins are holding up better in Orlando compared to Tampa and Sarasota, with Texas markets experiencing some struggles [25][26] Question: Have you had discussions with the administration regarding housing? - Management stated they have not had discussions but are aware of the ongoing conversations about improving housing affordability and the impact of local zoning regulations [30][31] Question: What are the expectations for gross margins going forward? - Management believes they are closer to the bottom of margin pressures, with potential for stabilization if costs for mortgage rate buy-downs decrease [34][35] Question: Is there any inclination towards M&A? - Management indicated there is nothing on the horizon but would consider opportunities that make sense within their existing markets [62] Question: What are the expectations for community count growth in 2026? - Management expects community count growth next year, targeting a 5% to 10% increase annually [64][65]

The UK is planning a package of emergency measures to boost housebuilding in London that could be announced as soon as Thursday https://t.co/fdmOS9SoJY ...

Core Insights - Lennox International (LII) reported revenue of $1.43 billion for the quarter ended September 2025, a year-over-year decline of 4.8% [1] - The company's EPS for the same period was $6.98, compared to $6.68 a year ago, indicating an EPS surprise of +4.33% [1] - The reported revenue fell short of the Zacks Consensus Estimate of $1.47 billion, resulting in a surprise of -2.66% [1] Financial Performance Metrics - Net Sales for Building Climate Solutions were $513.9 million, exceeding the average estimate of $488.88 million by 15 analysts, representing a year-over-year increase of +10.4% [4] - Net Sales for Home Comfort Solutions were $912.9 million, below the average estimate of $1.02 billion, reflecting a year-over-year decline of -11.6% [4] - Segment Profit for Building Climate Solutions was $134 million, surpassing the average estimate of $118.82 million [4] - Segment Profit for Home Comfort Solutions was $202.9 million, which was lower than the estimated $228.57 million [4] - The Corporate and other segment reported a loss of $-26.7 million, compared to the average estimate of $-29.29 million [4] Stock Performance - Lennox shares have returned +3.5% over the past month, outperforming the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Beazer Homes is addressing the significant affordability barriers faced by homebuyers due to high interest rates, home prices, and inflation [1] Company Focus - Beazer Homes is recognized as the country's 1 energy efficient homebuilder, emphasizing its commitment to improving home affordability and enhancing the quality of life for homeowners [1] - The company highlights its advanced home performance and curated choices as key factors in making homes more affordable and comfortable [1]

Core Insights - Beazer Homes is addressing the significant affordability barriers faced by homebuyers due to high interest rates, home prices, and inflation [1] - The company emphasizes its commitment to improving home affordability through advanced home performance and curated choices [1] - Beazer Homes positions itself as the leading energy-efficient homebuilder in the United States, highlighting its role in promoting a healthier and more comfortable lifestyle for homeowners [1]

Core Insights - The company is focusing on innovative incentives and pricing strategies to enhance buyer confidence and affordability, particularly in well-located communities [1][3] - Despite challenging market conditions, the company reported strong third-quarter results, exceeding guidance on key metrics such as home closings volume and gross margin [3][22] - The company is strategically managing its inventory and starts volume based on community-specific conditions, with a balanced approach to pricing and incentives [4][23] Financial Performance - The company reported net income of $201 million or $2.01 per diluted share, with adjusted net income at $211 million or $2.11 per diluted share [22] - Home closings revenue reached $2 billion from delivering 3,324 homes, slightly exceeding guidance [22] - The average closing price of homes was $602,000, above the guidance of approximately $600,000 [22] Market Dynamics - Monthly net absorption rates improved throughout the quarter, with September showing the strongest pace since May, attributed to favorable mortgage interest rates [7] - The company experienced a 155% increase in attendance for its national home buying webinar, indicating growing consumer interest [8] - The mix of orders by buyer groups remained consistent, with 30% entry-level, 51% move-up, and 19% resort lifestyle [10] Inventory and Land Management - The company controls 84,564 homebuilding lots, with 60% of the supply managed through options and off-balance sheet structures, enhancing capital efficiency [15][16] - Recent negotiations resulted in an 8% average price reduction on nearly 3,400 lots, reflecting favorable land acquisition conditions [18][19] - The company expects to invest approximately $2.3 billion in homebuilding land this year, down from earlier projections [19] Consumer Engagement and Technology - The company launched an AI-powered digital assistant to enhance customer engagement and streamline the home buying process [6] - The digital assistant provides personalized, data-driven guidance, improving the online shopping experience for potential buyers [6] - The company is expanding its tech-enabled sales tools to drive cost efficiencies and enhance customer experience [5] Strategic Outlook - The company anticipates opening over 100 new communities in 2026, aiming for mid to high single-digit outlet growth [12][29] - The company is focused on balancing the mix of to-be-built and spec homes based on customer demand, with a current mix of approximately 70% spec and 30% to-be-built [13] - The company remains committed to addressing housing affordability and collaborating with stakeholders to improve access to homeownership [33][37]

Financial Data and Key Metrics Changes - The company reported net income of $201 million or $2.01 per diluted share, with adjusted net income at $211 million or $2.11 per diluted share [24] - Home closings revenue totaled $2 billion from delivering 3,324 homes, slightly exceeding guidance [24] - The average closing price of homes was $602,000, above the guidance of approximately $600,000 [24] - Home closing gross margin was reported at 22.1%, with adjusted gross margin at 22.4%, slightly ahead of guidance [26][27] - The company ended the quarter with strong liquidity of approximately $1.3 billion, including $371 million of unrestricted cash [31] Business Line Data and Key Metrics Changes - The company delivered 3,324 homes, with a total of 6,831 homes under construction, including 3,313 specs [24][25] - Spec homes accounted for 72% of third-quarter sales but 61% of closings, with expectations for increased spec closing penetration in the near term [27] - Net orders in the third quarter totaled 2,468 homes, down just under 13% year over year, driven by a moderation in monthly absorption pace [27] Market Data and Key Metrics Changes - Monthly net absorption paces improved each month during the quarter, with September pacing at the strongest level since May [11] - The mix of orders by buyer group remained consistent, with 30% entry level, 51% move up, and 19% resort lifestyle [12] - The company noted that demand trends were broad-based, with increased traffic across consumer segments [42] Company Strategy and Development Direction - The company is focused on deploying innovative incentives and pricing offers to support buyer confidence and improve affordability [7] - A strategic approach to land acquisition has been emphasized, with a goal of controlling at least 65% of lots through options and off-balance sheet structures [18] - The company plans to open over 100 new communities in 2026, anticipating mid to high single-digit outlet growth [15][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic and political uncertainties impacting buyer urgency and sentiment [7] - The company remains optimistic about future growth opportunities as market dynamics stabilize [9] - Management highlighted the importance of collaboration with the administration to address housing affordability issues [38] Other Important Information - The company launched an AI-powered digital assistant to enhance customer engagement and improve the home buying experience [10] - The financial services team maintained a strong capture rate of 88%, driving financial services revenue of $56 million [30] Q&A Session Summary Question: Views on potential administration actions to encourage volumes - Management discussed productive conversations with the administration regarding housing shortages and affordability [38] Question: Differences in demand trends by consumer segments - Management noted broad-based increases in traffic, with entry-level consumers showing more engagement [42] Question: Details on innovative incentives being used - Management highlighted the use of various loan programs, including buy downs and adjustable loans, to stimulate sales [49] Question: Concerns about backlog and revenue growth - Management emphasized a community-specific approach to managing specs and production cycles to align with market demand [52] Question: Regional performance insights - Management provided insights on market performance, noting strength in Florida and challenges in Texas [63][66]