LEN
Lennar Corporation$104.30
Unclear
Target $112.24
Report: Mar 13, 2026Consumer Cyclical • Residential Construction • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$104.30+7.6%
Rec: UnclearConviction: Medium
Entry Target
$86.34
(17% below current)
Fair Value
$112.24
(8% above current)
Stop Loss
$60.00
(42% below current)
Position Size
Starter
Time Horizon
Transitional
Key Metrics
Live Snapshot
Market Data
52 Week High$144.24
52 Week Low$84.38
Avg. 3 Month Volume3.14M
Efficiency
LTM Gross Margin9.9%
LTM EBITDA Margin8.5%
LTM EBIT Margin8.1%
LTM Operating Margin7.8%
LTM ROA6.0%
LTM ROE9.3%
LTM ROIC8.6%
LTM ROCE7.7%
Capital Structure
Market Cap (MM)$21.4B
Enterprise Value (MM)$22.1B
Shares Outstanding246.99M
Total Debt (MM)$4.08B
Cash & Equivalents (MM)$3.47B
LTM Net Debt (MM)$617.43M
LTM Net Debt/EBITDA0.2x
Growth
TTM Rev. Growth-3.5%
Last 3-Yr Rev. CAGR0.5%
Last 3-Yr EBITDA CAGR-21.7%
Last 3-Yr EPS CAGR-20.3%
Valuation
Street Target Price$102.14
LTM EV/Revenue0.6x
LTM EV/Gross Profit6.5x
LTM EV/EBIT7.9x
LTM EV/EBITDA7.6x
LTM P/E10.3x
LTM EV/FCF782.9x
LTM P/FCF761.0x
LTM P/TB0.7x
LTM P/B1.0x
Dividend Yield2.3%
Payout Ratio25.1%
Executive SummarySituation: Current price is $104.3 versus fair value $112.24 (7.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Incentive Normalization: A reduction in sales incentives from 14% to below 10% would directly validate the margin recovery thesis and address the primary market concern regarding profitability erosion. Bear case centers on Lower-for-Longer Cyclical Downturn: If mortgage rates remain elevated, Lennar may be forced to maintain 14%+ incentives indefinitely, leading to a structural impairment of its ROIC, which is currently 6.4% (below the 10.9% cost of capital). Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
The asset-light model and Millrose spin-off have permanently reduced capital intensity, positioning Lennar to generate superior ROIC as incentives normalize. Furthermore, the 3.8 million unit national housing deficit provides a structural demand tailwind that favors large-scale builders.
Bear Case
Persistent 14% sales incentives and falling average selling prices (ASPs) suggest that Lennar is sacrificing price for volume, which could lead to a 'lower-for-longer' margin profile. Additionally, construction defect litigation from the Seminole Tribe poses a significant reputational and financial risk.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
Incentive Normalization: A reduction in sales incentives from 14% to below 10% would directly validate the margin recovery thesis and addres...
Near-Term (0-6 months)Impact: High
Governance Amendment: A board decision to permit the conversion of Class B shares to Class A, as urged by GAMCO, would likely eliminate the...
Long-Term (18+ months)Impact: Moderate
Lennar is at a critical juncture following the retirement of its Co-CEO and the completion of the Millrose spin-off, making the next two qua...
Primary Risks
Concern: High
Lower-for-Longer Cyclical Downturn: If mortgage rates remain elevated, Lennar may be forced to maintain 14%+ incentives indefinitely, leadin...
Concern: Medium
Construction Quality Litigation: The lawsuit by the Seminole Tribe alleging 552 uninhabitable homes could lead to hundreds of millions in da...
Concern: Medium
The governance outlook is defined by a three-pronged Outcome Tree: 1. Status Quo: Stuart Miller executes the asset-light pivot as sole CEO,...
Recent Activity
2026-01-09Analyst Target
+8.85%Firm: RBC Capital Price Target: $88.00 Price When Posted: $109.55 Implied Downside: -19.7%
2025-11-15SEC Filing (SC 13D/A)
-5.79%Lennar files Schedule 13D/A reporting 8.6% ownership stake in Hippo Holdings Inc.
2024-12-19SEC Filing (8-K)
-5.16%Lennar reports Q4 2024 and fiscal 2024 results with earnings decline amid rising interest rates
2024-09-20SEC Filing (8-K)
-5.33%Lennar reports Q3 2024 EPS of $4.26, up 10% year-over-year
2024-03-14SEC Filing (8-K)
-7.64%Lennar reports Q1 2024 EPS of $2.57, up 25% year-over-year
Valuation Table
9.8/10Decision Grade
Scenario Range
$69
Bear
$33
Base
$217
Bull
$104