August 10, 2018

LEN – Market expectations are for Uniform ROA to fade, but management is confident in their homebuilding operations, future returns, and their position within the industry


  • Lennar Corporation (LEN:USA)currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with an 11.8x Uniform P/E, implying muted expectations for the firm. However, management is confident in their new orders growth, their stated objective to increase their returns, and in their position within the homebuilding industry
  • Specifically, management generated an excitement marker when mentioning additional synergy with regard to cost and maturities attributable to the construction of 5,000-10,000 new apartment homes each year. Also, management is confident in their homebuilding operations, with new orders up 62% from Q1 2017, and in their stated objective to increase their returns. Furthermore, they are confident about the evolving position of their firm as a leader in the homebuilding industry
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