Analysts Concerned with Lennar's (LEN) Q1 Despite Earnings Beat; Shares Down 3%

Shares of Lennar Corp. (NYSE: LEN) are down 3.8 percent Tuesday afternoon following the company's first-quarter earnings report earlier.

While traders on the Street are booing the results Tuesday, let's take a look at what analysts are saying:

• Ticonderoga - Buy rating and $21 price target - "results look very strong with positive earnings, but our concern heading into the release was on the home-building side of the business, and generally, that was disappointing."
  
• Wells Fargo - Market Perform rating - believes the EPS number is deceiving as $0.19 per share of it is from a legal settlement and $0.08 is due to a gain on JV debt extinguishment. The firm mentions "with investor attention keenly focused on the spring selling season, LEN's orders may be considered weak, as they missed our estimate and we believe they also missed consensus."
  
• KeyBanc - Buy rating and $23 target - the firm notes while sales may have been down 12%, the true key was gross margins which remained fairly stable despite a slow recovery. KeyBanc believes the company is experiencing similarly weak trends as in the national housing market and that Lennar will post "flattish revenue as tough 1H11 comps tied to last year's tax credit make gains difficult."
  
• Goldman Sachs - Neutral rating - calculated $56.3 million in unexpected, one-time positives in the SG&A for the quarter. The firm liked Lennar's ability to maintain home incentives at 12% and a gross margin of 20.2%, but comments, "overall results are mixed with a negative tilt, in our view." Goldman was impressed with Rialto's ability to post a $23 million profit despite revenue of only $33 million.

Visit our Analyst Ratings page to track all the market-moving analyst action on shares of Lennar.

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