Lennar (LEN) Declines More Than Market: Some Information for Investors

The investment community will be paying close attention to the earnings performance of Lennar in its upcoming release. The company is expected to report EPS of $1.31, down 34.5% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $8.33 billion, reflecting a 5.42% fall from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.46 per share and revenue of $32.27 billion, indicating changes of -32.26% and -5.6%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for Lennar. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. At present, Lennar boasts a Zacks Rank of #4 (Sell).

From a valuation perspective, Lennar is currently exchanging hands at a Forward P/E ratio of 15.86. Its industry sports an average Forward P/E of 14.58, so one might conclude that Lennar is trading at a premium comparatively.

We can also see that LEN currently has a PEG ratio of 2.9. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Home Builders was holding an average PEG ratio of 2.9 at yesterday's closing price.

The Building Products - Home Builders industry is part of the Construction sector. This industry, currently bearing a Zacks Industry Rank of 102, finds itself in the top 42% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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