RBC Capital analyst Mike Dahl downgraded Lennar (NYSE: LEN) from Sector Perform to Underperform with a price target of $95.00 (from $106.00).

The analyst comments "We are downgrading LEN to UP from SP following a weak 4Q and 1Q guide with the FY'26 guide and expectations around a recovery in margin later this year still presenting risk to '26 earnings. Our FY’26E EPS declines -19% to $6.50, -27% below prior Street ests., as we model weaker absorption and margin. While numbers may have 'reset' yet again, there is no quick fix to margin headwinds in an affordability-constrained/ soft consumer environment. We expect low GM%/ROE to persist, while LEN's multiple at 1.5x remains elevated against a new FY'26 ROTE of ~9%. Potential gov’t actions to “support” housing could remain a positive narrative, but it’s unclear whether any policies ultimately prove beneficial or harmful to builder earnings. We lower our PT to $95 from $106."

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Shares of Lennar closed at $117.57 yesterday.