Is Lennar (LEN) a 'Buy' Ahead of Earnings?
One of the largest homebuilders in the United States, Lennar is set to report fiscal third-quarter earnings results on Wednesday after the closing bell. A Zacks Rank #4 (Sell) stock, Lennar missed earnings estimates in three of the past four quarters. But with market participants widely expecting an upcoming interest rate hike, is the downside already baked in for LEN prior to this week’s release?
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Analysts anticipate the company to post earnings of $1.30 per share, reflecting a 35% plunge versus the same quarter in the prior year. Estimates for the quarter have declined slightly over the past 60 days. Revenues are projected to drop roughly 5.5% to $8.33 billion.
Lennar LEN is caught in the teeth of the worst housing affordability environment in a generation. The homebuilder’s response has been to protect volume through incentives and price concessions — a strategy that keeps the production machine running but steadily erodes profitability.
Following its second-quarter results, Lennar cut full-year delivery guidance to 82,000–83,000 homes, citing what CFO Diane Bessette described as “current pressures on interest rates and continued macro uncertainty.” The broader homebuilding industry will likely remain stressed until long-term rates decline enough to restore affordability.
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This article originally published on Zacks Investment Research (zacks.com).
