We expect leading national homebuilder,
), to beat expectations when it reports fiscal third-quarter 2013
results on Sep 24.
Why a Likely Positive Surprise?
Our proven model shows that Lennar is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP:
Expected Surprise Prediction or ESP (Read:
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at 6.52%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #3 (Hold):
Lennar carries a Zacks Rank #3 (Hold).Note that stocks with Zacks
Ranks #1, 2 or 3 have a significantly higher chance of beating
earnings. The Sell-rated stocks (#4 and 5) should never be
considered going into an earnings announcement.
The combination of Lennar's Zacks Rank #3 (Hold) and 6.52% ESP
makes us very confident about a positive earnings beat.
What is Driving the Better-Than-Expected Earnings?
Increasing demand with continued housing recovery, solid
backlog position, rising home prices, strong liquidity position
and strategic land acquisitions are expected to help Lennar post
a positive earnings surprise in the upcoming quarter. In addition
to its homebuilding operations, growth is also expected from its
multiple platforms including Rialto, Mutlifamily and Financial
Services. Gross margin is expected to be 24.25% for the third
In fact, Lennar has been witnessing solid year-over-year
growth in new home orders, average selling prices and home
closings for the past few quarters.
Other Stocks to Consider
Here are some other construction/building products companies
which you may want to consider, as our model shows they have the
right combination of elements to post an earnings beat this
), Earnings ESP of +4.00% and a Zacks Rank #2 (Buy).
Hovnanian Enterprises Inc.
), Earnings ESP of +6.25% and a Zacks Rank #3 (Hold).
Taylor Morrison Home Corporation
), Earnings ESP of +2.63% and a Zacks Rank #3 (Hold).
HOVNANIAN ENTRP (HOV): Free Stock Analysis
LENNAR CORP -A (LEN): Free Stock Analysis
MASCO (MAS): Free Stock Analysis Report
TAYLOR MORRISON (TMHC): Free Stock Analysis
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