Lennar price target raised to $225 from $195 at UBS

UBS raised the firm’s price target on Lennar to $225 from $195 on Friday and keeps a Buy rating on the shares following Q3 results. The firm believes a higher valuation multiple is warranted as demand appears to be positioned to inflect positively, which should support further volume gains and potentially reduced incentive levels and higher margins for the builders. UBS also believes homebuilders should trade at a premium to the historical average of about 11-12-times price to earnings, as the group continues to gain outsized share generate above historical average margins, returns/cash flow and demonstrate an ability to consistently execute throughout a cycle.