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Lennar is Yahoo Finance Plus’ investment idea of the day

Yahoo Finance’s Jared Blikre reports details on Yahoo Finance’s Investment idea of the day.

Video Transcript

ALEXIS CHRISTOFOROUS: I want to get to the Yahoo Finance Plus Investment Idea of the Day. It is Lennar. That is the home builder. They are, of course, benefiting from the boom we're seeing in the housing market. So perhaps not a great surprise that there is a bullish call there, Jared.

JARED BLIKRE: Exactly. The homebuilders have really been on fire. Now you can see it's off a bit from its highs-- this is over the last two months-- and down a little bit today. Nevertheless, Argus Research likes the name. And they like the space. And here's a little bit of the reasoning. They're saying they're great. They have a long-term price target of $115. And they're raising their estimate.

So I'm going to skip a little of this and just go on to some of the reasoning. Sales, gross margins, earnings, and new orders better than our estimates and consensus. Guidance was solid. Management updated on its previously announced plans to spin off some of their other business in order to become a pure play home building and financial services business with smoother earnings. So kind of simplifying the business line there.

So here's something that executive chairman Stuart Miller said. The housing market's remaining very strong across the country, even as interest rates are heading higher. And this is helped by strong savings, government stimulus, and a return to normalcy. So they're seeing higher margins and higher selling prices for its customers. And here, you see. Let's take a longer term look at this one-- here's a one-year. Up 61% over that time period. Guys.