Lennar (LEN.US), one of the largest US residential developers, reported its financial results for the fourth fiscal quarter of 2025, which slightly disappointed investors. Despite maintaining high sales volumes, the company's financial results were weaker than the consensus, and the outlook for the coming quarter suggests a further slowdown in earnings growth.
In the fourth quarter, Lennar achieved adjusted earnings per share (EPS) of $2.03, which was significantly below both the previous year's figure ($4.06) and market forecasts ($2.24). Revenue was $9.37 billion, down 5.8% year-on-year, although slightly exceeding analysts' expectations. The gross margin on home sales declined to 17% from 22.1% a year earlier. The average home sale price was $386,000.
The outlook for the first quarter of 2026 is even more conservative: the company forecasts new orders of 18,000-19,000 (nearly 20,300 were expected) and a gross margin of 15-16% (16.9% was expected), all below market expectations. Analysts (including Citi, Barclays, and RBC) emphasize that the weak results and weaker-than-expected outlook confirm pressure on housing demand, growing competition from the secondary market, and the lack of rapid stabilization of margins, which translated into declines in Lennar's share price before the opening of today's session.
The company's shares are trading below Wednesday's opening price, in the zone of recent lows from November 18. As long as the company's shares remain below the 100-day exponential moving average (purple curve on the chart), the technical downtrend is likely to continue. Source: xStation
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