Update shared on04 Sep 2025
Analysts are divided on Lennar, with bulls citing sector optimism from potential rate cuts and increased investor interest, while bears point to margin pressures, weak recent results, and affordability headwinds, resulting in the consensus price target holding steady at $124.00.
Analyst Commentary
- Bullish analysts are raising valuation multiples across the homebuilding sector following a re-rating as investors price in forward optimism about lower interest rates.
- Upward price target revisions reflect increased generalist investor interest and more favorable sector sentiment.
- Bearish analysts are lowering targets due to margin headwinds, including higher SG&A expenses and weaker gross margins.
- Recent quarterly results missed consensus expectations, with management providing weak guidance attributed to a soft housing market, continued affordability pressures from high interest rates, and required concessions.
- Earnings are under pressure as rising construction costs are partially offset by cost-control efforts, but softening average selling prices and higher operating expenses weigh on profitability.
What's in the News
- Berkshire Hathaway acquired a minority stake in Lennar, totaling 7.1 million shares for $797 million across Q1 and Q2 2025.
- Lennar completed a $516.7 million share buyback tranche between March and May 2025, bringing total buybacks under its current program to 59.1 million shares or 20.5% of shares outstanding.
- The company launched multiple new home communities, including North River Farms in Oceanside (CA), Shearwater in St. Johns County (FL), Anderson Farms in Maricopa (AZ), New Port Corners in New Port Richey (FL), Stillwater in Lakewood Ranch (FL), Valencia by FivePoint in Santa Clarita Valley (CA), and Seaton Creek in Jacksonville (FL).
- New home offerings feature broad price points from the mid-$200,000s to mid-$900,000s, targeting first-time, family, and active adult buyers, and emphasizing resort-style amenities and “Everything’s Included” features.
- Lennar continues significant geographic expansion and product innovation, such as Next Gen® suites, rear-entry garages for enhanced walkability, and eco-friendly designs in master-planned communities.
Valuation Changes
Summary of Valuation Changes for Lennar
- The Consensus Analyst Price Target remained effectively unchanged, at $124.00.
- The Consensus Revenue Growth forecasts for Lennar remained effectively unchanged, at 4.4% per annum.
- The Net Profit Margin for Lennar remained effectively unchanged, at 5.68%.
Disclaimer
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