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

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Lennar (LEN - Free Report) closed at $51.57 in the latest trading session, marking a +1.22% move from the prior day. This change outpaced the S&P 500's 0.83% gain on the day. At the same time, the Dow added 0.93%, and the tech-heavy Nasdaq gained 0.9%.

Heading into today, shares of the homebuilder had gained 11.1% over the past month, outpacing the Construction sector's gain of 1.48% and the S&P 500's loss of 2.38% in that time.

LEN will be looking to display strength as it nears its next earnings release. In that report, analysts expect LEN to post earnings of $1.32 per share. This would mark a year-over-year decline of 5.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.53 billion, down 2.5% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.31 per share and revenue of $21.64 billion. These totals would mark changes of -16.38% and +5.21%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for LEN. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.03% lower. LEN is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that LEN has a Forward P/E ratio of 9.59 right now. Its industry sports an average Forward P/E of 9.55, so we one might conclude that LEN is trading at a premium comparatively.

We can also see that LEN currently has a PEG ratio of 1.12. 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. Building Products - Home Builders stocks are, on average, holding a PEG ratio of 1.19 based on yesterday's closing prices.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 18, putting it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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