How Lennar Stock Has Benefited From Lower New Home Inventory, Falling Mortgage Rates

by Trefis Team
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Lennar Corporation (NYSE: LEN) is the largest homebuilder in the U.S. in terms of consolidated revenue. The company is also an originator of mortgage loans and a developer of multifamily rental properties. The company has seen its stock rise by about 15% over the past month, trading at levels of around $61 currently. The run-up in the stock mirrors a broader rally in home-building stocks, as declines in mortgage rates are making housing more affordable, stoking demand. There has also been a reduction in new home inventory in the U.S. The 30-year mortgage rate has dropped from levels of as much as 5% last year to under 3.7% currently. Below, we take a look at Lennar’s financial performance over the last few years and what lies ahead.

View our interactive dashboard analysis on Why Lennar Stock Is Up 15% Over The Last Month

How does Lennar’s Revenue Growth In 2018 compare with that in prior periods and what’s the forecast?

Total Revenues for Lennar substantially increased from $12.6 Bil in 2017 to $20.6 Bil in 2018; an increase of 62.7%. The growth was driven by the acquisition of CalAtlantic Group, a major home builder and the full-year impact of the 2017 acquisition of luxury home builder WCI Communities.

This compares with Total Revenues growth of:

  • 21.8% in 2015 compared to 2014
  • 15.6% in 2016 compared to 2015
  • 15.5% in 2017 compared to 2016

We expect Total Revenues growth to be 7% in 2019.

How does Lennar’s Total Expense In 2018 compare with that in prior periods and what’s the forecast?

Total Expense for Lennar substantially increased from $11.5 Bil in 2017 to $18.3 Bil in 2018; an increase of 59.8%. The growth was driven by the aforementioned acquisitions.

This compares with Total Expense growth of:

  • 21.4% in 2015 compared to 2014
  • 16.4% in 2016 compared to 2015
  • 19.1% in 2017 compared to 2016

We expect Total Expense growth to be 7% in 2019.

How do Lennar’s Net Income and EPS In 2018 compare with that in prior periods and what’s the forecast?

For more information on Lennar’s Net Income and EPS, view our interactive dashboard analysis.

 

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