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Homebuilders are missing the days when the only requirement to get a bank loan was a heartbeat. At the same time, interest rates for loans are low and many parts of the country are finally experiencing price appreciation.

Of the two homebuilders reporting the week of June 25th, one is doing very well and the other is facing greater challenges. Both companies are reporting before the opening bell.

Lennar Corporation (NYSE:LEN)

Lennar is one of the nation's leading builders of quality homes for all generations, building affordable, move-up, and retirement homes. Lennar trades an average of 6.6 million shares per day with a market cap of $5.1 billion.

Lennar is expected to announce fantastic second-quarter earnings before the market opens on June 27, 2012. The consensus estimate is currently 16 cents a share, an improvement of nine cents (56.3%) from seven cents during the same period last year. Currently, the total number of analyst buy recommendations are eight, and seven analysts believe the best course of action is to hold. The average analyst target price for Lennar is $28.38.

The trailing 12 months price-to-earnings ratio is 64.1 and the mean fiscal year estimate price-to-earnings ratio is 32.91, based on earnings of 82 cents per share this year. Investors are receiving 16 cents in dividends for a yield of .59%. Normally, I consider a price-to-earnings multiple of anything above 20 to be worrisome.

In the last month the stock has fallen 5.28%, but that was after an almost eight-month move higher from lows just above $12 a share. The major trending moving averages are all moving higher, with the 60-day moving average above the 90-day, which is above the critical 200-day.

For the same fiscal period year over year, revenue has declined to $3.07 billion last fiscal year compared to $3.12 billion in the previous year. The bottom line has rising earnings year over year of $95.26 million last fiscal year compared to -$417.14 million in the previous year.

Smart money is betting against Lennar's continued success. About 24% of the float is short the homebuilder.

KB Home (NYSE:KBH)

KB Home is a builder of single-family homes with domestic operations in several Western states, and international operations in France. The company was founded in 1957 and is headquartered in Los Angeles, Calif. KB Home trades an average of 5.1 million shares per day with a market cap of $646 million.

KB Home is anticipated to report good second-quarter earnings before the market opens on June 29, 2012. The consensus estimate is currently a loss of $0.36 a share, an improvement of $0.53 (-147.2%) from a loss of $0.89 cents during the same period last year. Currently, the total number of analyst buy recommendations is three, and 11 analysts believe the best course of action is to hold. The average analyst target price for KB Home is $10.73,

KB Home is expected to lose -$1.03 per share this year. Investors are receiving $0.10 in dividends for a yield of 1.19%. In the last month the stock has moved higher in price 10.69%, but remains in a bearish trend.

Revenue growth relative to last year appears to be problematic for management. Comparing year-over-year fiscal years, revenue has declined to $1.59 billion last fiscal year compared to $1.82 billion in the previous year. The bottom line has lower losses year over year of -$69.36 million last fiscal year compared to -$101.78 million in the previous year.

Industry and Peers Comparison:

LEN

(NYSE:PHM)

(NYSE:DHI)

(NYSE:HOV)

KBH

(NYSE:TOL)

(NYSE:BZH)

Strong Buy

6

2

6

1

2

7

2

Moderate Buy

2

2

0

0

1

1

0

Hold

7

10

7

2

11

6

1

Moderate Sell Ratings

0

0

0

0

1

0

0

Strong Sell Ratings

1

0

1

6

1

1

3

Ave Analyst Price Target

$28.38

$9.92

$16.80

$2.25

$10.73

$29.45

$3.63

Operating Margin

2.40%

1.40%

3.60%

-12.40%

-7.50%

2.10%

-15.80%

Quick Ratio

1.6

0.8

0.5

1.3

1.1

1.7

9.4

Price/Sales

1.6

0.8

1.5

0.3

0.5

2.9

0.4

Price Change 52 Weeks

41.00%

20.60%

40.30%

21.50%

-33.40%

23.20%

-16.50%

Source: Homebuilders Lennar, KB Homes Report Earnings The Week Of June 25