LEN - Embedded Expectations Analysis - 2021 02 18
Lennar Corporation (LEN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 10.3x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management appears concerned about their cash flows, housing production pace, and cost and pricing pressuresSpecifically, management may be overstating the strength of their cash flows, financial position, and the macro housing outlook for 2021-2022. Moreover, they may lack confidence in their ability to meet housing market demand, continue matching the pace of sales growth with production and delivery, and adjust incentives to align with demand dynamics. Furthermore, they may be concerned about labor shortages, pricing pressures, and the progress of their technology initiatives. In addition, management may lack confidence in their ability to sustain increases in like-for-like pricing and mitigate construction cost pressures. Finally, they may lack confidence in their ability to focus on generating long-term returns for shareholders and improve customer experience
Lennar is a homebuilder in the United States, an originator of residential and commercial mortgage loans, a provider of title insurance and closing services and a developer of multifamily rental properties. The company's homebuilding operations 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 unconsolidated entities in which it has investments. The company operates under the Lennar brand name. The company creates and participates in joint ventures that acquire and develop land for its homebuilding operations, for sale to third parties or for use in the ventures' own homebuilding operations.
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