Lennar Stock Drops on Home Deliveries Forecast Miss | ORBITAL AFFAIRS

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Watch This Key Price Level: Lennar Stock Analysis

Lennar (LEN) shares experienced a drop in extended trading on Monday following the release of a lower-than-expected forecast for home deliveries in the current quarter. The company anticipates delivering between 20,500 and 21,000 homes, with the midpoint falling below analysts’ consensus view. Despite this forecast, Lennar exceeded expectations for its fiscal second-quarter earnings and revenue, showcasing strength in the market.

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Key Takeaways

  • Lennar’s forecast for home deliveries in the current quarter falls short of analysts’ expectations.
  • The company reported earnings and revenue that surpassed estimates for the fiscal second quarter.
  • Purchasers responded positively to increased sales incentives, driving growth for Lennar.
  • Investors should monitor the $150 price level for potential buying opportunities or a breakdown scenario.

Lennar’s Performance and Forecast

Lennar, a Florida-based homebuilder with a national presence, reported a profit of $3.45 per share for the last quarter, outperforming expectations. The company’s revenue of $8.77 billion marked a 9% increase from the previous year and exceeded analysts’ estimates. Despite challenges such as high mortgage rates and consumer sentiment, Lennar’s sales incentives drove increased demand for new homes.

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New orders for Lennar surged by 19% in the quarter, contributing to a backlog of 17,873 homes valued at $8.2 billion. To attract buyers, the company reduced the average price per home to $426,000 from $449,000 in the previous year.

Monitor This Level Amid Post-Earnings Weakness

Lennar shares have been consolidating within a trading range since early February, establishing clear support and resistance levels. The stock recently dipped below the 50-day moving average, signaling caution among investors ahead of the quarterly results. As post-earnings weakness persists, it is crucial to watch the $150 price level for potential buying interest near the lower trendline of the trading range.

However, investors should also be wary of a possible double top pattern if Lennar’s shares break below the lower trendline, which coincides with the pattern’s neckline. A breakdown could lead to a revisit of lower support around $133, near a significant swing high from July 2023.

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In after-hours trading on Monday, Lennar shares fell by 2.2% to $153.10, reflecting market sentiment following the company’s forecast announcement.

Conclusion

Despite Lennar’s lower-than-expected delivery forecast for the current quarter, the company’s strong performance in the fiscal second quarter indicates resilience in the face of market challenges. Investors should closely monitor the $150 price level for potential buying opportunities or a breakdown scenario that could signal a bearish trend.

As always, it is essential for investors to conduct thorough research and consider their risk tolerance before making investment decisions based on market analysis and forecasts.

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. The author does not own any securities mentioned in this article.

Original Source: Investopedia

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