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

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Lennar (LEN) closed at $75.79 in the latest trading session, marking a -1.85% move from the prior day. This change lagged the S&P 500's daily gain of 0.21%. Meanwhile, the Dow gained 0.19%, and the Nasdaq, a tech-heavy index, added 0.02%.

Coming into today, shares of the homebuilder had lost 9.94% in the past month. In that same time, the Construction sector lost 5.67%, while the S&P 500 lost 8.08%.

Investors will be hoping for strength from Lennar as it approaches its next earnings release. The company is expected to report EPS of $3.99, up 35.25% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.13 billion, up 26.38% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $16.33 per share and revenue of $34.12 billion, which would represent changes of +14.44% and +25.74%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Lennar. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.24% higher. Lennar is currently a Zacks Rank #3 (Hold).

Digging into valuation, Lennar currently has a Forward P/E ratio of 4.73. For comparison, its industry has an average Forward P/E of 4.24, which means Lennar is trading at a premium to the group.

Investors should also note that LEN has a PEG ratio of 4.64 right now. 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 0.56 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 173, putting it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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