J.P. Morgan analyst Michael Rehaut has maintained their neutral stance on LEN stock, giving a Hold rating yesterday.
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Michael Rehaut has given his Hold rating due to a combination of factors impacting Lennar’s performance and outlook. The company has adjusted its delivery expectations downward due to a softening market, which has led to a reduction in its guidance for closings. Despite a strong order growth in the third quarter, Lennar had to increase sales incentives to maintain this growth, indicating a challenging demand environment.
Furthermore, the company’s valuation appears somewhat expensive compared to its larger-cap peers, particularly on a price-to-earnings basis. The outlook for below-average gross and operating margins, as well as return on equity for the upcoming fiscal years, also contributes to the Hold rating. However, Lennar’s strong balance sheet and operational discipline are seen as positive factors, and there is potential for improvement in return on equity as the company continues to streamline its operations and adopt an asset-light model.
Rehaut covers the Consumer Cyclical sector, focusing on stocks such as Whirlpool, NVR, and Installed Building Products. According to TipRanks, Rehaut has an average return of 6.2% and a 56.36% success rate on recommended stocks.
In another report released yesterday, Citi also maintained a Hold rating on the stock with a $133.00 price target.