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On Friday, BTIG adjusted its price target Lennar Corporation (NYSE:), a leading home construction company, at $177.00, up from its previous target of $170.00. The firm continues to recommend a Buy rating on the stock. The adjustment follows Lennar’s first-quarter earnings report for 2024, which revealed earnings per share (EPS) of $2.57. This beat both BTIG’s estimate of $2.20 and the consensus estimate of $2.21.
Despite the positive earnings result, Lennar shares fell 7.6% on Friday. The market reaction is attributed to a slight increase in 10-year Treasury rates, management’s comments about rising debt levels in mortgage applications, and some confusion over Lennar’s announcement to separate some land assets into a new taxable entity.
BTIG highlights several key factors in Lennar’s performance that support a positive long-term outlook. These include strategic efforts to improve product consistency and efficiency, which should contribute to volume growth and margin improvements. Additionally, Lennar demonstrated a strong commitment to share repurchases, exceeding BTIG’s expectations for the quarter, and maintained one of the fastest growth rates in the industry.
In light of these developments, BTIG has revised its earnings estimates for Lennar. The forecast for FY24 EPS was raised to $15.20 from $14.65, and for FY25 EPS to $16.95 from $16.30. The revised estimates take into account better-than-expected volumes, financial services revenues and a lower tax rate for both years.
The firm believes Lennar’s business model is on a trajectory towards higher returns and sustainable cash generation, which has led to the increase in price target and reiteration of Buy rating.
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