Lennar Corporation (NYSE:LEN) is scheduled to report its 2nd-quarter 2013 earnings on Tuesday, June 25. Below I have highlighted this quarter's earnings estimates as well as provided a fundamental look at the company's financial position and valuation.
Profile and Estimates
Lennar has a market cap of $7.45 billion and had annual sales last year of $4.1 billion. Shares currently trade for $37.85 and are up 1.89% YTD and 47.65% above their 52-week low of $25.66 per share.
LEN data by YCharts
Analysts have a mean target price of $43.76 and a median price target of $45.00 on the shares. This quarter, analysts on average are expecting an EPS of $0.33 on revenues of $1.33 billion.
Below is a valuation metrics that I have compiled based on this year's EPS estimates and the company's 5YR P/E ratios.
Based on this analysis, LEN's target price of $43.76 falls slightly below the company's average EPS estimates and P/E history, which reflects continued economic pressures. Looking forward however, the average EPS estimate for next year of $2.37 implies a 41% improvement.
To get an idea of the forces driving the company's return I have provided above a Three-Step Dupont Analysis that shows marked improvements from the tough times the company faced in 2008 and 2009. Net income has moved up and came in at 16.54% last year without much deviation around the average asset turnover and with a consistent amount of financial leverage.
Analysts are expecting higher EPS in the near future but the company still faces strong economic headwinds. Shares have significantly come off of their 2008-2009 lows and currently trade at book value so the next step to a higher valuation will most likely need to be driven by sales and income growth. Keep an eye out for earnings and new developments when the company reports its 2nd-quarter earnings on Tuesday.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.