Susquehanna Upgrades Lennar (LEN) to Positive on Earnings Power and Money Grab
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Susquehanna analyst Jack Micenko upgraded Lennar (NYSE: LEN) from Neutral to Positive with a price target of $94.00 (from $77.00).
The analyst comments "We are upgrading LEN shares on: 1) a significant boost in '21 earnings power, and 2) what we see as an increased likelihood the company begins to monetize their portfolio of class A apartment rental properties as the company continues to increase its focus on core homebuilding operations. Earlier this week the company reported quarterly results that smashed consensus estimates, but the +16% order comp didn't appear to meet elevated buy-side expectations. The biggest takeaway from Tuesday's call was that this slower growth is intentional, as the company focuses more on taking price then growing for growth's sake. Next year should see a reacceleration of community count growth after this year's pandemic-driven pause, and when combined with better gross margin from this strategic shift, has meaningful impact on our 2021 estimates. We are increasing our '21 EPS estimate from $7.32 to $8.52 (+16%), and applying our unchanged 11x target P/E multiple yields a new fair value price target of $94, implying ~20% upside from last night's close."
Shares of Lennar closed at $77.98 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Comments, Hot Upgrades, Upgrades
Related EntitiesSusquehanna International Group of Companies, Earnings
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