Raymond James analyst Buck Horne reiterated an Outperform rating on the shares of Lennar Corp (NYSE:LEN) raised the price target from $150 to $165.
Lennar reported core EPS of $5.17 for its F4Q23 results, topping estimates of $4.59.
Another upside quarterly result and a well-timed reprieve in mortgage rates stand to unlock significant pent-up demand this spring, says the analyst.
However, in 4Q, Lennar had to battle a much tougher affordability equation as mortgage rates flirted with the 8% threshold in October, adds the analyst.
The housing market briefly appeared near a tipping point in October, as buyers increasingly struggled with the sharp rise in mortgage rates to ~8%, the analyst writes.
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The demand rebounded in response to the rapid decline in rates in November and thus the margins on deliveries in 1Q24 will reflect the heightened incentives and advertising costs related to 4Q orders, says the analyst.
By combining price reductions, mortgage rate buydowns, and other incentives, Lennar was able to keep buyers engaged and generate 32% y/y new order growth, according to the analyst.
Meanwhile, as per the analyst, the elevated selling incentives will be felt in lower-than-expected 1Q24 gross margins.
LEN continues to successfully demonstrate the blueprint for how well-capitalized builders keep taking market share from the existing home market, writes the analyst.
Heading into 2024, the analyst says that LEN is primed with a net debt-free balance sheet, a land-light pivot, and construction cycle times that are rapidly normalizing.
The raised $165 price target projects LEN trading at 10.0x FY25 EPS, in line with its long term median multiple.
Price Action: LEN shares are trading higher by 1.14% at $148.91 on the last check Tuesday.
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雷蒙德·詹姆斯分析師巴克·霍恩重申了對倫納爾公司(紐約證券交易所代碼:LEN)股票的跑贏大盤評級,將目標股價從150美元上調至165美元。
Lennar報告稱,其 F4Q23 業績的核心每股收益爲5.17美元,高於預期的4.59美元。
分析師表示,另一項上行季度業績和適時緩解抵押貸款利率將釋放今年春季被壓抑的大量需求。
但是,分析師補充說,在第四季度,由於抵押貸款利率在10月份達到8%的門檻,倫納爾不得不與更艱難的負擔能力方程式作鬥爭。
這位分析師寫道,由於抵押貸款利率急劇上升至約8%,買家越來越難以應對,房地產市場在10月份短暫出現了臨界點附近。
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分析師表示,由於11月份利率的快速下降,需求反彈,因此24年第一季度的交付利潤率將反映與第四季度訂單相關的激勵措施和廣告成本的增加。
分析師表示,通過將降價、抵押貸款利率收購和其他激勵措施相結合,Lennar得以保持買家的參與度,並創造了32%的新訂單同比增長。
同時,根據分析師的說法,在低於預期的24年第一季度毛利率中,銷售激勵措施將有所增加。
分析師寫道,LEN繼續成功展示資本充足的建築商如何繼續從現有國內市場奪取市場份額的藍圖。
這位分析師表示,進入2024年,LEN已爲淨無債務資產負債表、輕型轉折點和正在迅速正常化的施工週期做好了準備。
上調的目標股價爲165美元,預計LEN的交易價格爲25財年每股收益的10.0倍,與其長期中位數倍數一致。
價格走勢:週二最後一次支票,LEN股價上漲1.14%,至148.91美元。
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