Homebuilding company Lennar Corporation (NYSE:LEN) could highlight falling mortgage rates and the impact of a potential rate cut when the company reports third-quarter financial results Thursday after market close.
Here are the earnings estimates, what experts are saying and key items to watch.
Earnings Estimates: Analysts expect Lennar to report third-quarter revenue of $9.00 billion, down from $9.42 billion in last year’s third quarter, according to data from Benzinga Pro.
The company has beaten analyst estimates for revenue in five straight quarters and in nine of the last 10 quarters.
Analysts expect Lennar to report third-quarter earnings per share of $2.10, down from $3.90 in last year’s third quarter.
The company missed analyst estimates for earnings per share in the second quarter, marking the first miss in earnings per share in the last 10 quarters.
What Experts Are Saying: Lennar shares are now positive in 2025, which comes after a sharp fall from their all-time highs in September 2024, something not lost on Freedom Capital Markets Chief Market Strategist Jay Woods.
“Lennar looks to build upon its recent winning ways since bottoming in April,” Woods said in a weekly newsletter. “Shares had fallen as much as 47% from their September 2024 peak but are starting to see their fortunes turn around.”
Woods highlighted the impact that mortgage rates and rate cuts from the Federal Reserve could have on Lennar stock going forward.
“Interest rates play an integral role in their success and the anticipation of cuts and a drop in mortgage rates has led to a nice rally.”
The market strategist said the Lennar stock chart shows upside targets of $180 if shares can break above the area of resistance at around the $140 to $145 range. “Shares continue to show great bullish technical signs.”
Ahead of the earnings report, Wells Fargo recently raised the price target from $110 to $135 while maintaining an Equal Weight rating.
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Key Items to Watch: Mortgage rates and rate cuts will be key topics when the company reports quarterly results.
Mortgage rates recently dropped to 6.35%, the lowest since October 2024. The lower rates could lead to a surge in housing demand, and it will be interesting to hear what Lennar has to say on the topic.
The Federal Reserve is expected to announce a rate cut on Wednesday, which comes one day before Lennar’s report. Lower rates could also factor into housing demand and be a catalyst for the stock moving forward.
Lennar saw a 6% year-over-year increase in new orders in the second quarter; investors will expect more momentum. The company’s backlog was 15,538 homes with a dollar value of $6.5 billion at the end of the second quarter.
Another item for investors to watch, which the company is unlikely to discuss, is Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK) (NYSE: BRK-B) increasing its stake in the homebuilder.
In the second quarter, Berkshire Hathaway increased its holdings in Lennar Class B shares by 19%. The conglomerate also bought 7,048,993 shares of Lennar Class A shares. Buffett could be betting on a strong quarter and future growth for the homebuilder.
LEN Price Action: Lennar stock is up 1% to $135.12 on Wednesday, versus a 52-week trading range of $98.42 to $193.80. Lennar stock is up 7.1% year-to-date in 2025.
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