Stock Traders Purchase Large Volume of Lennar Put Options (NYSE:LEN)

Key Points

• Unusually high bearish options activity: Investors purchased 7,075 Lennar put options, about 18% above the typical daily volume, as shares fell to $77.46.
• Analyst sentiment remains weak: Multiple firms recently cut their price targets, and Lennar carries an average “Reduce” rating with a consensus target of $92.13.
• Fundamental and operational concerns are rising: Analysts expect declining earnings, while stop-work orders affecting Lennar projects in Clarksville, Tennessee, could create delays and added costs. The company’s latest quarterly revenue fell 5.2% year over year despite an EPS beat.

Lennar Corporation (NYSE:LEN - Get Free Report) was the target of unusually large options trading on Thursday. Stock investors acquired 7,075 put options on the company. This represents an increase of approximately 18% compared to the typical daily volume of 6,008 put options.

Wall Street Analyst Weigh In

Several equities analysts recently commented on the stock. Zacks Research lowered shares of Lennar from a "hold" rating to a "strong sell" rating in a research report on Tuesday, June 16th. Wells Fargo & Company cut their price target on shares of Lennar from $90.00 to $85.00 and set an "equal weight" rating on the stock in a research note on Monday, June 15th. Keefe, Bruyette & Woods decreased their price target on shares of Lennar from $86.00 to $85.00 and set an "underperform" rating for the company in a report on Wednesday, June 17th. Royal Bank Of Canada lowered their price objective on shares of Lennar from $88.00 to $85.00 and set an "underperform" rating for the company in a research note on Monday, June 15th. Finally, Barclays dropped their price objective on shares of Lennar from $80.00 to $79.00 and set an "underweight" rating on the stock in a report on Monday, June 15th. One equities research analyst has rated the stock with a Buy rating, eight have issued a Hold rating and ten have issued a Sell rating to the company. Based on data from MarketBeat, the stock presently has an average rating of "Reduce" and an average price target of $92.13.

More Lennar News

Here are the key news stories impacting Lennar this week:

• Positive Sentiment: Local officials in Palm Bay, Florida, approved additional homes for Lennar’s Emerald Lakes development, supporting the company’s community pipeline and future sales opportunities. Palm Bay approves more homes for Emerald Lakes
• Positive Sentiment: Lennar celebrated the opening of The Park at Amberwood, a new community amenity that may improve the appeal and marketability of homes in the development, although the direct near-term financial impact is likely limited. Lennar Celebrates the Grand Opening of The Park at Amberwood
• Neutral Sentiment: Lennar is expected to report earnings Wednesday. Investors are focused on housing demand, orders, margins and cancellations ahead of the release. A report also noted that the shares were trading below book value before earnings, which could provide valuation support but also reflects concerns about profitability and growth. Lennar Expected to Announce Earnings
• Negative Sentiment: Clarksville, Tennessee, issued stop-work orders covering every active Lennar Homes permit after alleged city violations. Dozens of projects have reportedly been halted while Lennar works toward a resolution, creating potential construction delays, added costs, reputational damage and deferred revenue. Stop Work Order issued for every Lennar Homes active permit
• Negative Sentiment: Analysts expect Lennar’s upcoming earnings to decline, and Zacks said the company lacks the combination of factors typically associated with a likely earnings beat. That outlook increases the risk of disappointing guidance or further margin pressure. Analysts Estimate Lennar to Report a Decline in Earnings

Lennar Stock Performance

Shares of LEN stock traded down $3.30 during trading hours on Thursday, hitting $77.46. The company's stock had a trading volume of 1,913,000 shares, compared to its average volume of 2,827,042. The stock has a market cap of $18.66 billion, a PE ratio of 12.12, a price-to-earnings-growth ratio of 2.69 and a beta of 1.39. Lennar has a 12-month low of $76.63 and a 12-month high of $140.71. The company has a 50 day moving average of $85.16 and a 200 day moving average of $90.02. The company has a current ratio of 4.91, a quick ratio of 0.91 and a debt-to-equity ratio of 0.19.

Lennar (NYSE:LEN - Get Free Report) last posted its earnings results on Thursday, June 11th. The construction company reported $1.31 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.24 by $0.07. Lennar had a net margin of 4.93% and a return on equity of 7.08%. The company had revenue of $7.94 billion during the quarter, compared to the consensus estimate of $8.08 billion. During the same period in the previous year, the firm posted $1.81 earnings per share. The firm's quarterly revenue was down 5.2% on a year-over-year basis. On average, sell-side analysts forecast that Lennar will post 5.46 EPS for the current fiscal year.

Lennar Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, July 24th. Stockholders of record on Friday, July 10th were paid a $0.50 dividend. The ex-dividend date was Friday, July 10th. This represents a $2.00 dividend on an annualized basis and a dividend yield of 2.6%. Lennar's dividend payout ratio is presently 31.30%.

Institutional Investors Weigh In On Lennar

Several hedge funds have recently bought and sold shares of LEN. Viking Global Investors LP lifted its holdings in Lennar by 86.7% during the second quarter. Viking Global Investors LP now owns 2,523,594 shares of the construction company's stock valued at $279,135,000 after purchasing an additional 1,172,068 shares in the last quarter. Van Lanschot Kempen Investment Management N.V. increased its stake in shares of Lennar by 90.9% during the fourth quarter. Van Lanschot Kempen Investment Management N.V. now owns 1,963,373 shares of the construction company's stock worth $201,835,000 after purchasing an additional 934,856 shares in the last quarter. Freestone Grove Partners LP acquired a new position in shares of Lennar during the 4th quarter worth about $95,941,000. Bank of Nova Scotia lifted its stake in Lennar by 1,303.1% in the 4th quarter. Bank of Nova Scotia now owns 490,105 shares of the construction company's stock valued at $50,383,000 after buying an additional 455,174 shares in the last quarter. Finally, Janus Henderson Group PLC boosted its holdings in Lennar by 19.7% in the 1st quarter. Janus Henderson Group PLC now owns 2,546,970 shares of the construction company's stock worth $221,176,000 after buying an additional 419,745 shares during the last quarter. Hedge funds and other institutional investors own 81.10% of the company's stock.

Lennar Company Profile

Lennar Corporation is one of the largest homebuilders in the United States. Founded in 1954 and headquartered in Miami, Florida, the company designs, constructs, and sells single-family homes and communities for a range of buyers, including first-time, move-up, and active-adult purchasers.

Lennar operates across many of the country's major housing markets, including communities in the West, Southwest, Southeast, Mid-Atlantic, and other metropolitan areas. Its homebuilding operations offer a variety of floor plans and home designs, while the company also develops residential communities and provides related services such as mortgage financing, title, and closing services through its financial-services businesses.

In addition to traditional homebuilding, Lennar has expanded into multifamily development and other residential real-estate activities.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.