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TMN - Lennar

Lennar shares tick up on strong housing demand

Shares of Lennar Corporation increased on Wednesday’s extended trading after it reported better-than-expected quarterly results due to strong housing demand.

The second-leading US homebuilder elevated 1.97% or 1.74 points to $90.25 per share. It followed a jump of 2.76% or 2.38 points to $88.51 per share in the regular hours market.

This upward trend sent a gain of $512.06 million to the company’s market valuation. However, its stock price still trades 20.84% or 23.30 points lower since the start of the year.

Accordingly, demand for housing significantly skyrocketed during the COVID-19 pandemic.

Buyers capitalized on record-low mortgage rates, and remote workers looked for more living space.

In line with this, Lennar’s first-quarter revenue increased 16.00% year-over-year to $6.20 billion.

The figure outpaced the average market estimate of $6.16 billion and the previous record of $5.33 billion.

Then, the firm’s sales pace remained robust and consistent throughout the reported period.

In addition, it noted substantial traffic to its welcome home centers and website, suggesting that housing demand remains solid for the near term.

Subsequently, orders, an indicator of future revenue, added 1.00% to 15,747 from 15,570 homes a year earlier. It beat the expected number of 14,987 orders.

Likewise, deliveries inched up 2% to 12,538 units from the past result of 12,314.

Eventually, it reported earnings of $2.70 per share, excluding market-to-market losses on technology investments. The record came in higher than the analysts’ consensus of  $2.58 EPS.

Moreover, its net earnings was $800.20 million. Similarly, it surpassed the first-quarter net earnings attributable in 2021 of $642.70 million.

Lennar emphasized that the housing industry continues to exhibit sturdy movement, outweighing the worldwide supply constraints.

Lennar Raises FY22 Outlook

In line with the firm’s bullish outlook, Lennar increased its forecast for fiscal 2022. It anticipates delivering 68,000 homes, beyond its previous projection of 67,000.

Consequently, the Miami-based company sees gross margins in the range of 27.25% to 28.00%. It also forecasts an average sales price of $470,000 to $475,000.

Looking ahead to the second quarter, the business expects deliveries of 16,000 to 16,300.

American builders, including Lennar, have been edging up prices to take advantage of soaring demand. The mounting mortgage rates nudge buyers to buy before they climb even more.

The business said it is confident of generating bright growth and enhancing its current market position. Furthermore, it authorized a new $2.00 billion share buyback program.

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