) is set to report its first-quarter fiscal 2014 results on March
20 before the market opens. Last quarter, it posted a positive
surprise. Let's see how things are shaping up for this
Factors to Consider
The recent spike in interest/mortgage rates and political turmoil
has paused the rate of recovery of the housing market. However,
management believes that the slowdown in sales pace is only
temporary and the housing recovery is still very much intact.
In-fact, management witnessed sequential improvement in order
trends every month throughout the fourth quarter with November
being the strongest month in the quarter. As a result, the
company expects a strong spring selling season for fiscal 2014.
However, gross margins are expected to be softer in the first
quarter. In fact, management expects that gross margins will be
lower is the first half but highest in the fourth quarter.
Our proven model does not conclusively show that Lennar
Corporation is likely to beat earnings this quarter. That is
because a stock needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here, as you will see below.
The Earnings ESP is 0.00%.
Lennar Corporation carries a Zacks Rank #2 (Buy) which when
combined with a 0.00% ESP makes surprise prediction difficult. We
caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other homebuilding companies with a positive
earnings ESP and a Zacks Rank #1, 2 or 3, which you may
DR Horton Inc.
), with Earnings ESP of +3.03% and a Zack sRank #2 (Buy).
), with Earnings ESP of +0.38% and a Zacks Rank #2 (Buy).
MDC Holdings Inc.
), with Earnings ESP of +8.70% and a Zacks Rank #3 (Hold).
D R HORTON INC (DHI): Free Stock Analysis
LENNAR CORP -A (LEN): Free Stock Analysis
MDC HLDGS (MDC): Free Stock Analysis Report
NVR INC (NVR): Free Stock Analysis Report
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