Keefe Bruyette analyst Jade Rahmani keeps an Outperform rating on Lennar (LEN) after the company’s land subsidiary, Millrose Properties, filed a Form S-11 for a planned taxable spin-off. Preliminarily, the firm estimates the pro forma financials and 8.5% options payment fee could imply an 80-140 basis point impact to Lennar’s gross margin. In addition, it estimates Millrose’s pro forma equity of $6.0B could imply a 300-400 point increase in Lennar’s return on equity to approximately 21% from 18% in 2023 and 2024’s estimated 16.6%.
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- Lennar price target lowered to $165 from $180 at Wells Fargo
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