Lennar price target raised to $96 from $88 at Credit Suisse

Credit Suisse analyst Daniel Oppenheim raised the firm’s price target on Lennar to $96 from $88 and keeps a Neutral rating on the shares. Lennar’s Q2 guidance of 21.0%-21.5% gross margins and comments after higher margins in the second half of 2023 suggest that Q1/2023 was the bottom for gross margins, the firm says. Credit Suisse expects further sequential erosion in gross margins through 2023 due to the likely need to increase incentives to spur hesitant buyers, but recognizes that there will be cost savings from lower construction costs. The firm thinks this will be a key issue as investors try to gain confidence in the overall outlook.