Based on the provided data and recent market analysis, here's a concise evaluation of LEN's valuation:
LEN appears fairly valued at current levels based on several key metrics. The stock trades at a PE ratio of 11.71x and EV/EBITDA of 8.45x in Q4 2024, which are reasonable for the homebuilding sector.
Recent analyst actions suggest mixed sentiment - RBC Capital lowered their price target to $125 while maintaining a Hold rating, citing balance sheet impacts from the Millrose spin-off. UBS remains bullish with a $192 target, though they've reduced it from $205.
The stock has underperformed the broader market, declining 8.3% over the past 52 weeks compared to the S&P 500's 24.1% gain. This underperformance stems from affordability issues, high mortgage rates, and margin pressures.
The recent Millrose Properties spin-off completion, where Lennar distributed 80% of shares to stockholders, marks a strategic shift toward a land-light homebuilding model. This could improve capital efficiency but may pressure near-term margins.
Looking at Q4 2024 results, LEN missed both earnings and revenue expectations, suggesting some operational challenges persist. The EPS of $4.03 fell short of the $4.16 consensus while revenue of $10 billion missed the $10.2 billion forecast.