Analyst Anthony Pettinari of Citi maintained a Hold rating on Lennar, with a price target of $133.00.
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Anthony Pettinari has given his Hold rating due to a combination of factors impacting Lennar’s financial outlook. The company’s shares experienced a decline following a miss in the third quarter and a conservative guidance for the fourth quarter. Management’s decision to reduce its delivery volume guidance for fiscal year 2025 by 5% at the midpoint reflects a strategic shift to stabilize margins, moving away from an aggressive pace-over-price approach.
Despite the slowdown in volumes, Lennar anticipates maintaining cost savings through its ‘even flow’ strategy, which has proven effective in reducing construction costs. However, the company’s margins have decreased compared to peers, with a widening margin gap. While there is potential upside from declining mortgage rates and peer multiple expansion, these factors contribute to a cautious outlook, justifying the Hold rating.
In another report released on September 19, Bank of America Securities also maintained a Hold rating on the stock with a $135.00 price target.