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Lennar (LEN) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Lennar (LEN) closed at $51.69 in the latest trading session, marking a -0.58% move from the prior day. This change lagged the S&P 500's daily gain of 1.3%. Meanwhile, the Dow gained 1.41%, and the Nasdaq, a tech-heavy index, added 1.75%.

Prior to today's trading, shares of the homebuilder had gained 4.27% over the past month. This has outpaced the Construction sector's gain of 3.11% and the S&P 500's gain of 0.46% in that time.

Wall Street will be looking for positivity from LEN as it approaches its next earnings report date. On that day, LEN is projected to report earnings of $1.32 per share, which would represent a year-over-year decline of 5.71%. Our most recent consensus estimate is calling for quarterly revenue of $5.52 billion, down 2.64% from the year-ago period.

LEN's full-year Zacks Consensus Estimates are calling for earnings of $5.32 per share and revenue of $21.63 billion. These results would represent year-over-year changes of -16.22% and +5.16%, respectively.

It is also important to note the recent changes to analyst estimates for LEN. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.14% higher. LEN currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that LEN has a Forward P/E ratio of 9.77 right now. Its industry sports an average Forward P/E of 9.92, so we one might conclude that LEN is trading at a discount comparatively.

It is also worth noting that LEN currently has a PEG ratio of 1.14. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LEN's industry had an average PEG ratio of 1.22 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 24, putting it in the top 10% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow LEN in the coming trading sessions, be sure to utilize Zacks.com.

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