One of the leading homebuilders in the U.S,
) reached a new 52-week high of $41.24 on January 07, 2013.
Lennar carries a Zacks #2 Rank (Buy) for the near term.
Lennar is gaining momentum from the fast improving housing
fundamentals. With housing recovery, there has been a drop in
inventory levels and an increase in home prices.
Third Quarter 2012 Recap
Lennar Corporation reported adjusted earnings (excluding
income tax adjustments) of 34 cents per share in the third
quarter of fiscal 2012, beating the Zacks Consensus Estimate by
25.9%. Earnings also skyrocketed 209% from the prior-year
quarter. Earnings growth was driven by improved homebuilding
revenues and solid operating margins.
LENNAR CORP -A (LEN): Free Stock Analysis
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Total revenue in the quarter climbed 34% to $1.1 billion, driven
by pricing and volume growth in a stabilizing housing market.
Revenues also surpassed the Zacks Consensus Estimate of $1.03
Lennar has witnessed solid year-over-year growth in new home
orders, average selling prices and home closings in all the three
quarters of 2012. Margins have also been above average, despite
rising costs, driven by strong operating leverage. Lennar appears
confident of significant growth in the rest of the fiscal year
Lennar has delivered positive earnings surprises in all the
quarters of 2012 with an impressive average earnings surprise of
27.4% in the trailing four quarters.
We believe that the company is performing better than its peers
by increasing sales prices, reducing incentives, improving
volumes and by making opportunistic land acquisitions. Moreover,
Lennar's focus on the quality of communities instead of quantity
also benefits its margins and new sales orders.
Other Stocks to Consider
With the housing market recovering steadily, many other stocks in
the homebuilding sector are currently performing well. These
) - Zacks #2 Rank (Buy),
The Ryland Group, Inc.
) - Zacks #1 Rank (Strong Buy) and
Meritage Homes Corporation
) - Zacks #2 Rank (Buy).