CORRECTED-Homebuilder Lennar Q3 revenue misses estimates

Overview

• Lennar Corp Q3 revenue falls 9% yr/yr, missing analyst expectations, per LSEG data

• Net earnings per share drops to $2.29 from $4.26 last year

• New home orders rise 12% to 23,004 homes

• Co repurchased 4.1 mln shares for $507 mln

Outlook

• Lennar expects Q4 new orders of 20,000 - 21,000 homes

• Company anticipates Q4 deliveries of 22,000 - 23,000 homes

• Lennar sees Q4 gross margin at approximately 17.5%

• Company optimistic about declining interest rates impacting Q4

Result Drivers

• MARKET WEAKNESS - Lennar attributes revenue decline to a 9% decrease in average home sales price due to market weakness

• INCENTIVES IMPACT - Additional incentives and price adjustments led to a reduced average sales price and lower gross margin

• EFFICIENCY GAINS - Improved inventory turns and cycle time reflect Lennar's production-first approach and successful negotiations with trade partners

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 5 "strong buy" or "buy", 15 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the homebuilding peer group is "buy."

• Wall Street's median 12-month price target for Lennar Corp is $130.00, about 2.2% below its September 18 closing price of $132.87

Press Release: ID:nPn33Cfm6a