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Opinions The Panic-Proof Portfolio (Stockchase Research)
Lennar Corp.LENPAST TOP PICKDec 14, 2023
Stock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Premium content
Premium contentSometimes momentum works. Balance sheet is strong, home inventories are weak, and fundamentals are strong overall. Add to this cheaper capital/lower rates. The outlook looks good.
Joe TerranovaHe's long in the homebuilders which are declining now. September earnings were okay, but shares were weak. These stocks peaked last spring, and he can't see a return to that as long as interest rates remain high.
Joe Terranova
The homebuilders had seen fundamental strength peak in the spring selling season. Doesn't mean there will be a sharp fall for the homebuilders, but are moderating gains (at least in fundamentals, not share price). They still benefit from holding a tight inventory of homes in the US, which will benefit them long term. They peaked earlier, true. He execpts a modest share price recovery.
Joe TerranovaOwns shares in company.
Expecting growth in home building.
Excellent company with strong management team.
Low level of supply is US housing increasing demand for new housing.
Home builders using finance products (low mortgage interest rates) to stimulate sales.
Growing steadily.
Gordon ReidPremium contentThis US homebuilder will benefit from calming inflation and interest rate movements. Management expects gross margins to be just under 25% and are guiding towards a 10% growth in sales next year. They have a good land position yet cycle through inventory effectively. We like that cash reserves are growing, while debt is retired and stock bought back. It trades at 9x earnings and 1.3x book. We recommend placing a stop-loss at $100, looking to achieve $141 -- upside potential of 20%. Yield 1.2%
(Analysts’ price target is $141.00)
Our PAST TOP PICK with LEN has achieved its target at $141. To remain disciplined, we recommend covering half the position at this time and maintaining the stop at $112.