Lennar (LEN) closed at $77.70 in the latest trading session, marking a -1.21% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.58%. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 1.05%.
Prior to today's trading, shares of the homebuilder had lost 5.31% lagged the Construction sector's loss of 4.59% and the S&P 500's gain of 0.97%.
Market participants will be closely following the financial results of Lennar in its upcoming release. The company is predicted to post an EPS of $1.54, indicating a 24.14% decline compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $8.72 billion, down 6.94% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.95 per share and revenue of $31.52 billion. These totals would mark changes of -38.59% and -7.79%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Lennar. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 3.14% downward. As of now, Lennar holds a Zacks Rank of #5 (Strong Sell).
Investors should also note Lennar's current valuation metrics, including its Forward P/E ratio of 15.9. This indicates a premium in contrast to its industry's Forward P/E of 12.43.
We can also see that LEN currently has a PEG ratio of 2.91. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Building Products - Home Builders industry stood at 2.22 at the close of the market yesterday.
The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 234, putting it in the bottom 5% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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Lennar Corporation (LEN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).