Homebuilder company Lennar (NYSE:LEN) reported better-than-expected earnings results for the first quarter (ended February 28, 2023). Shares of the company gained 3.4% in yesterday’s extended trading session.
The company posted revenues of $6.5 billion, up 5% year-over-year, and surpassed the Street’s estimate of $5.9 billion. Lennar witnessed a 9% rise in the number of home deliveries, to 13,659 homes. Also, the top line benefitted from higher Financial Services revenues and Other income.
Meanwhile, the company posted earnings of $2.06 per share, higher than the Street’s estimate of $1.55 per share. The reported figure compares favorably with $1.69 in the prior year’s quarter.
Regarding other metrics, new orders declined 10% to 14,194 homes, and the dollar value of these orders also tanked 18% to $6.4 billion. Furthermore, the backlog fell 29% to 19,403 homes.
In terms of outlook, Lennar expects Q2 deliveries of 15,000–16,000 homes and new orders of 16,000–17,000 homes. Moreover, the company raised its Fiscal Year 2023 home deliveries target to 62,000 – 66,000 from the 60,000 – 65,000 previously guided for.
Is Lennar Stock a Good Buy?
Despite headwinds in the housing market, Lennar has delivered decent results in the first quarter. However, the future performance of the company will depend on interest rate movements made by the Federal Reserve.
Currently, analysts are cautiously optimistic about LEN stock with a Moderate Buy consensus rating. This is based on seven Buy, four Hold, and one Sell recommendations. The average price target of $110.20 implies 9.4% upside potential from the current level. The stock is up 10% so far in 2023.
