UPDATE: JPMorgan Downgrades Lennar (LEN) to Neutral

July 12, 2022 3:25 AM EDT
Get Alerts LEN Hot Sheet
Price: $79.85 --0%

Rating Summary:
    22 Buy, 9 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 10 | New: 15
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(Updated - July 12, 2022 5:12 AM EDT)

JPMorgan analyst Michael Rehaut downgraded Lennar (NYSE: LEN) from Overweight to Neutral with a price target of $80.00 (from $83.00).

The analyst comments "We downgrade LEN to a Neutral rating relative to its peers from Overweight, as our Dec. 2022 price target represents upside potential roughly in-line with our universe average. We note that our price target’s multiple against our FY23E (we also add $10/share to reflect our estimate of the value of its proposed spin) is modestly below our target multiples for DHI and PHM, as while we estimate roughly in-line gross and operating margins for LEN in FY22 and FY23, at the same time, we estimate its ROE (post-spin) still trailing DHI/PHM by roughly 700-1,000 bps in FY22 and roughly 500-700 bps in FY23. Hence, we view our price target’s implied 2022E-end P/TB multiple of roughly 1.15x, which compares to DHI at roughly 1.45x and PHM at roughly 1.35x, as appropriate."

For an analyst ratings summary and ratings history on Lennar click here. For more ratings news on Lennar click here.

Shares of Lennar closed at $78.70 yesterday.

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