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Lennar (LEN) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Lennar (LEN) closed the most recent trading day at $59.73, moving +0.71% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.08%. Elsewhere, the Dow lost 0.01%, while the tech-heavy Nasdaq lost 0.04%.

Prior to today's trading, shares of the homebuilder had lost 3.04% over the past month. This has lagged the Construction sector's gain of 5.38% and the S&P 500's gain of 4.35% in that time.

LEN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.90, down 3.06% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.65 billion, up 2.91% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.49 per share and revenue of $21.77 billion, which would represent changes of -13.54% and +5.83%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for LEN. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. LEN is currently a Zacks Rank #2 (Buy).

Digging into valuation, LEN currently has a Forward P/E ratio of 10.8. This represents a discount compared to its industry's average Forward P/E of 10.81.

It is also worth noting that LEN currently has a PEG ratio of 1.2. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LEN's industry had an average PEG ratio of 1.17 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 13, putting it in the top 6% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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