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Lennar (LEN) Dips More Than Broader Markets: What You Should Know

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Lennar (LEN - Free Report) closed at $41.01 in the latest trading session, marking a -1.87% move from the prior day. This change lagged the S&P 500's 0.66% loss on the day. At the same time, the Dow lost 0.99%, and the tech-heavy Nasdaq lost 1.63%.

Coming into today, shares of the homebuilder had lost 11.24% in the past month. In that same time, the Construction sector lost 16.7%, while the S&P 500 lost 8.1%.

Investors will be hoping for strength from LEN as it approaches its next earnings release, which is expected to be January 9, 2019. In that report, analysts expect LEN to post earnings of $1.96 per share. This would mark year-over-year growth of 51.94%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.56 billion, up 73.2% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.94 per share and revenue of $20.67 billion, which would represent changes of +29.66% and +63.44%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for LEN. These revisions help to show the ever-changing nature of 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 8.26% lower. LEN is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, LEN is currently trading at a Forward P/E ratio of 8.46. For comparison, its industry has an average Forward P/E of 6.65, which means LEN is trading at a premium to the group.

Meanwhile, LEN's PEG ratio is currently 0.47. 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 0.49 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 240, which puts it in the bottom 6% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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