Lennar Delivers Strong Q2 Results; Revenues Rise 22%

Florida-based home construction company Lennar Corporation (LEN) reported strong fiscal second-quarter (ended May 31) results, which surpassed consensus estimates.

The company reported net earnings of $2.95 per share, higher than the $2.36 per share estimated by analysts. It also compares favorably with the net earnings of $1.65 recorded in the same quarter last year.

Revenues came in at $6.4 billion, which surpassed analysts’ estimates of $5.88 billion and jumped 22% from the year-ago period.

Notably, the company witnessed new orders of 17,157 homes during the quarter, a 32% increase over last year. New home deliveries of 14,493 homes witnessed a 14% improvement. (See Lennar stock chart on TipRanks)

“We continue to focus on production costs and cycle times as the homebuilding industry ramps up to meet growing demand. Lennar is uniquely positioned with our size, scale and production oriented Everything’s Included business model to mitigate the well documented industry supply challenges.” said Jon Jaffe, co-CEO and co-president of Lennar.

For Fiscal 2021, the company expects to deliver 62,000 – 64,000 homes. Financial Services operating earnings of $460 million – $470 million are anticipated.

Two months ago, Wells Fargo analyst Deepa Raghavan initiated a Hold rating and price target of $112 on the stock. This implies 22.62% upside potential. The analyst entered the housing sector with an optimistic view.

Consensus among analysts is a Moderate Buy based on 6 Buys and 4 Holds. The Lennar average analyst price target stands at $109.78, which implies upside potential of 20.19% from current levels. Shares have gained 43.9% over the past year.