After-Hours Earnings Report for December 18, 2024 : MU, LEN, EPAC, WS, MLKN, SCS
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 18 2024
0mins
Should l Buy LEN?
Source: NASDAQ.COM
Earnings Reports Overview: Several companies, including Micron Technology, Lennar Corporation, and Enerpac Tool Group, are set to report earnings on December 18, 2024, with varying forecasts indicating significant increases or decreases compared to the same quarter last year.
Performance Insights: Most companies have consistently beaten expectations in previous quarters, with notable projections such as Worthington Steel expecting a 536.36% increase in earnings per share, while others like MillerKnoll anticipate a decrease.
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Analyst Views on LEN
Wall Street analysts forecast LEN stock price to fall
13 Analyst Rating
0 Buy
7 Hold
6 Sell
Moderate Sell
Current: 121.260
Low
80.00
Averages
101.18
High
125.00
Current: 121.260
Low
80.00
Averages
101.18
High
125.00
About LEN
Lennar Corporation is a homebuilder and an originator of residential and commercial mortgage loans. The Company is also a provider of title insurance and closing services, and a developer of multifamily rental properties. The Company's segments include Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar others. Its Homebuilding segments primarily include the construction and sale of single-family attached and detached homes, as well as the purchase, development and sale of residential land directly and through its unconsolidated entities. The Company's Financial Services segment primarily provides mortgage financing, title and closing services primarily for buyers of its homes, as well as property and casualty insurance. The Company’s Multifamily segment is involved in the development, construction and property management of multifamily rental properties. its Lennar Other segment includes fund investments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Investor Sentiment Shifts: Despite challenges, retail investor sentiment turned bullish early Thursday, reflecting a focus on profitability metrics and 2026 guidance, although some users expressed concerns about the stock's future.
- Shareholder Accumulation Signals: Lennar Corp. increased its stake in Opendoor to 18.8 million shares, with Bank of America and Vanguard also boosting their holdings, indicating strong bullish sentiment despite the stock's over 50% decline from its peak.
- New Management Strategy: Under new CEO Kaz Nejatian, Opendoor is pivoting towards artificial intelligence and adjusting its business model, yet these changes have not significantly boosted stock performance, raising investor concerns about sustained profitability.
See More
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- Significant Holdings: Lennar holds approximately 18.8 million shares and several series of tradable warrants in Opendoor, indicating a substantial bet on the stock and confidence in the digital, instant-offer home sales model.
- Positive Market Reaction: The support from Lennar, a major industry player, is interpreted by the market as reducing the risk of Lennar exiting its position, which naturally boosts Opendoor's share price and reflects investor optimism regarding housing demand.
- Earnings Outlook: Opendoor is set to report earnings on Thursday, with Wall Street expecting a loss of about 10 cents per share on quarterly revenue near $595 million; any signs of narrowing losses or stronger builder-channel growth could extend the stock's rally.
- Mixed Technical Signals: While Opendoor's stock is trading 12.4% below its 20-day SMA, it is 0.2% above its 200-day SMA, indicating a mix of short-term weakness and long-term bullish potential, reflecting market uncertainty about its near-term direction.
See More
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- AI Disrupts Traditional Software: The rise of Anthropic poses significant challenges to traditional software companies like Workday and Salesforce, particularly in the application of AI technology, threatening their market share and customer loyalty.
- Surge in Capital Expenditures: Tech giants like Amazon and Google have significantly raised their capital expenditure outlooks, with Amazon projecting spending to reach $200 billion, far exceeding the $147 billion consensus, which could impact stock performance and investor confidence.
- Intensified Market Competition: The rapid advancement of AI technology raises questions about the value of enterprise software, leading investors to adopt a pessimistic view on the future of traditional software companies, especially in labor-intensive areas that may face workforce reductions due to AI adoption.
- Investor Confidence Shaken: Despite significant advancements by companies like Anthropic and OpenAI in the AI space, market confidence in traditional software companies is waning, resulting in poor stock performance over the past six months and raising concerns about future profitability.
See More
U.S. Housing Shortage and Investment Opportunities
- Housing Shortage Reality: According to Goldman Sachs, the U.S. faces a shortage of 3 to 4 million homes, significantly exceeding the normal annual construction of 1.5 million, leading to fierce competition among buyers and rising prices, thus providing sustained market opportunities for major homebuilders.
- Growth Potential of LGI Homes: LGI Homes is projected to achieve an 11% sales growth this year and 6% next year, reaching $2 billion in sales by 2027, showcasing its ability to stand out in a competitive market, particularly among first-time homebuyers.
- Market Leadership of D.R. Horton: As the largest homebuilder in the U.S., D.R. Horton reported $34.3 billion in sales last year, with expectations to grow sales to nearly $40 billion in the coming years, and its reasonable 10x P/E ratio offers a compelling value proposition for investors.
- Income Model of Invitation Homes: Invitation Homes owns and manages over 100,000 homes, with projected sales growth of only 3%, but its 4.34% dividend yield significantly surpasses the market average, attracting more income-focused investors.
See More
Mixed Close for US Stocks as Retail Sales Stagnate
- Retail Sales Weakness: US December retail sales were unchanged month-over-month, falling short of the +0.4% expectation, indicating weakness in consumer spending that could lead to a downward revision in Q4 GDP, thereby impacting market confidence and economic growth outlook.
- Employment Cost Index Decline: The US Q4 employment cost index rose by +0.7% quarter-over-quarter, below the expected +0.8%, marking the smallest increase in 4.5 years, suggesting easing labor cost pressures that may influence the Fed's monetary policy decisions.
- Mixed Market Performance: The Dow Jones Industrial Average reached a new all-time high, closing up +0.10%, while the S&P 500 and Nasdaq 100 indices fell by -0.33% and -0.56%, respectively, reflecting divergent market sentiment and uncertainty.
- Focus on Upcoming Economic Data: The market will closely monitor upcoming economic data, including January nonfarm payrolls and unemployment rate, which are expected to significantly influence future monetary policy and market trends.
See More
Lennar Stock Potential Driven by Housing Shortage
- Housing Shortage: The U.S. faces a dire shortage of 2 to 8 million homes, and despite the high prices of newly constructed and existing homes, the demand for homeownership remains strong, indicating unmet market needs.
- Lennar Stock Performance: Lennar (LEN) shares are currently trading 36% below their 2024 peak, and while a slight revenue dip is expected in 2025, forecasts predict over 5% revenue growth in 2027, reflecting market confidence in its future.
- Valuation Analysis: Lennar's stock is trading at less than 17 times expected earnings for 2026, with projected earnings per share of $8.82, and although the market remains cautious about its outlook, the current price is considered relatively cheap for long-term investment.
- Potential Policy Impact: Discussions around a government-backed rent-to-own program for first-time buyers are gaining traction, with Lennar suggested as a leading proponent, which could further drive market demand and enhance its stock value.
See More
