On January 12, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy), just a few days before it is
due to report its fourth quarter and full year 2012 results.
Why the Upgrade?
Lennar has announced impressive results in all the quarters of
2012. 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 about significant growth in fourth quarter and
even thereafter as the housing fundamentals improve rapidly.
Lennar is due to report its fourth quarter results before the
opening bell on January 15. The Zacks Consensus Estimate at the
moment is 43 cents per share.
Lennar reported third quarter results on September 27, 2012.
Third quarter adjusted earnings (excluding income tax
adjustments) of 34 cents per share beat the Zacks Consensus
Estimate by 25.9%. Earnings also skyrocketed 209% from the
prior-year quarter. The earnings growth was driven by improved
homebuilding revenues and solid operating margins.
Total revenue in the quarter climbed 34% to $1.1 billion,
driven by pricing and volume growth with the housing market
stabilizing. Revenues also beat the Zacks Consensus Estimate of
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 selling 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 sector improving steadily, many other housing
companies are currently doing well. Some names worth mentioning
Meritage Homes Corporation
) - Zacks #1 rank and
) - Zacks Rank #2 (short term 'Buy').
LENNAR CORP -A (LEN): Free Stock Analysis
MERITAGE HOMES (MTH): Free Stock Analysis
PULTE GROUP ONC (PHM): Free Stock Analysis
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