RBC Capital lowered the firm’s price target on Lennar (LEN) to $98 from $122 and keeps a Sector Perform rating on the shares after its Q2 earnings miss and below-consensus Q3 guidance. The company’s gross margins remain under pressure, compounded by ballooning SG&A along with weaker volumes and average selling prices, the analyst tells investors in a research note. RBC adds that the management continues to use pricing and incentives as a lever, which requires meaningful concessions from trade/supplier partners to stabilize gross margins.
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