Lennar price target lowered to $122 from $125 at RBC Capital

RBC Capital analyst Mike Dahl lowered the firm’s price target on Lennar (LEN) to $122 from $125 and keeps a Sector Perform rating on the shares after its Q1 results and below-consensus Q2 guidance. The weak guide reflects a worsened demand/margin outlook as conditions on the ground remain weak, with Lennar’s strategy focused on meeting the market on price and supporting orders at the expense of gross margins, the analyst tells investors in a research note. RBC adds that the company’s Q2 outlook reflects the recent sizable step up in incentives persisting, which can be expected amid a challenged backdrop, and the firm sees limited potential for sequential improvement in gross margins for the second half of the year.