Lennar Corporation (NYSE:LEN) Analysts Are Pretty Bullish On The Stock After Recent Results

Investors in Lennar Corporation (NYSE:LEN) had a good week, as its shares rose 6.9% to close at US$149 following the release of its annual results. It was a workmanlike result, with revenues of US$34b coming in 2.6% ahead of expectations, and statutory earnings per share of US$13.73, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Lennar

Following the latest results, Lennar's ten analysts are now forecasting revenues of US$36.4b in 2024. This would be a modest 6.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 5.4% to US$14.59. In the lead-up to this report, the analysts had been modelling revenues of US$34.8b and earnings per share (EPS) of US$14.30 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

It will come as no surprise to learn that the analysts have increased their price target for Lennar 8.9% to US$152on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Lennar analyst has a price target of US$190 per share, while the most pessimistic values it at US$110. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Lennar's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.3% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.7% annually. Even after the forecast slowdown in growth, it seems obvious that Lennar is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Lennar's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Lennar going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Lennar has 1 warning sign we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.