Lennar Corporation (NYSE: LEN) has confirmed it will release its Q3 earnings on Monday, September 20, 2021.
What to look for
The company is expected to deliver a YoY earnings increase on higher revenue when it releases its Q3 results for the period ended August 2021. The exceptional growth in the homebuilding and financial services segment coupled with solid market conditions are expected to continue driving revenue and earnings in Q3. The housing market remains strong despite interest rates ticking up, and that will boost earnings in Q2.
Earnings: Stockearning’s Estimated EPs is $3.24 per share in Q3 2020, representing a YoY growth of 52.8%. In Q2 2021, net earnings attributable to the company were $831.4 million or $2.65 per diluted share. Minus some non-operational losses and gains, the company reported net earnings of $923.6 million or $2.95 per share. Historical EPS Performance for the past 12 quarters shows the company has topped estimates 11 times (91%0 and missed once (8%).
Revenue: During the quarter, home sales revenue was up 21% to $6 billion due to an increase in the number of home deliveries with a gross margin from home sales of $1.6 billion or 26.1%. The company delivered 14,462 new homes minus unconsolidated entities during the quarter. For the third quarter, the company expects revenue of $7.27 billion, representing a 23.8% YoY increase.
Stock movement: Since the last earnings release, the stock has gained 9.2%. Following the earnings release, the share price has been UP 32 times in the past 47 quarters. So, the historical price reaction suggests a 68% chance of the share going UP after earnings release. According to Stockearning's algorithm, the predicted move on the first day is 3%, while the predicted move on the seventh day is 5%.
What analysts are saying
After its Q2 earnings beat and "solid" guidance, Argus analyst Chris Graja maintained his "Buy" rating and a price target of $115 on Lennar, with management also offering an update regarding the previously-announced ancillary businesses spin-off plans to order to become a pure-play homebuilding/financial services entity. According to Graja, Lennar's "advantage" over many of its competitors includes its geographic range, which lends consistency to profits growth. In addition, its marketing efforts focused on entry-level customers in cheap locations such as the Carolinas, Florida, and Texas.
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