Why Lennar (LEN) Dipped More Than Broader Market Today

Lennar (LEN) ended the recent trading session at $116.12, demonstrating a -4.24% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 0.28% for the day. Elsewhere, the Dow saw a downswing of 0.54%, while the tech-heavy Nasdaq depreciated by 0.31%.

Shares of the homebuilder have appreciated by 2.76% over the course of the past month, underperforming the Construction sector's gain of 6.1%, and outperforming the S&P 500's loss of 0.76%.

Investors will be eagerly watching for the performance of Lennar in its upcoming earnings disclosure. The company is expected to report EPS of $0.96, down 55.14% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $6.83 billion, indicating a 10.47% decline compared to the corresponding quarter of the prior year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $6.44 per share and a revenue of $33 billion, indicating changes of -20.1% and -3.48%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Lennar. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 5.77% downward. Lennar currently has a Zacks Rank of #5 (Strong Sell).

Looking at valuation, Lennar is presently trading at a Forward P/E ratio of 18.83. This signifies a premium in comparison to the average Forward P/E of 15.01 for its industry.

It is also worth noting that LEN currently has a PEG ratio of 1.76. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Home Builders was holding an average PEG ratio of 2.25 at yesterday's closing price.

The Building Products - Home Builders industry is part of the Construction sector. Currently, this industry holds a Zacks Industry Rank of 241, positioning it in the bottom 2% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.