Lennar (LEN) Stock Forecast & Price Target

Lennar demonstrates a robust outlook due to stronger-than-expected demand in the housing market, contributing to anticipated unit closing growth of 5% year-over-year in fiscal year 2027 and a projected gross margin of 17.8%. The company's strategic focus on developing environmentally certified homes aligns with increasing regulatory demands and consumer preferences for sustainable building practices, potentially enhancing its competitive position. Additionally, recent declines in mortgage rates have positively influenced traffic, indicating a favorable market environment for Lennar's financial performance going forward.

Lennar's financial outlook has taken a significant downturn, with FY’26 expected earnings per share declining by 19% to $6.50, which is 27% below prior street estimates, primarily due to weaker absorption rates and reduced margins. Additionally, gross margins for FY'26 are projected to fall to 16.1%, reflecting a 160 basis point year-over-year decrease, correlated with a notable drop in average backlog prices from $462,000 to $393,000 over the past three quarters. Lastly, the company's orders for FY'26 have been adjusted to 84.7k units, indicating a slower monthly pace of orders compared to previous periods, further suggesting underlying weakness in demand and profitability.