Results: Lennar Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Lennar Corporation (NYSE:LEN) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Results were good overall, with revenues beating analyst predictions by 2.5% to hit US$8.8b. Statutory earnings per share (EPS) came in at US$3.45, some 6.3% above whatthe analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Lennar

Following last week's earnings report, Lennar's 13 analysts are forecasting 2024 revenues to be US$35.2b, approximately in line with the last 12 months. Statutory earnings per share are forecast to shrink 2.7% to US$14.31 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$35.5b and earnings per share (EPS) of US$14.57 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$175, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Lennar analyst has a price target of US$237 per share, while the most pessimistic values it at US$144. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. We would highlight that revenue is expected to reverse, with a forecast 2.9% annualised decline to the end of 2024. That is a notable change from historical growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Lennar is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Lennar analysts - 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.

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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.

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