7 Best Construction Stocks To Buy According to Analysts

2. Lennar Corporation (NYSE:LEN-B)

Average Analyst Price Target Upside: 21.69%

Number of Hedge Fund Holders: 60

Lennar Corporation (NYSE:LEN-B) is one of the largest homebuilders in the United States and is headquartered in Florida. It has a diverse portfolio that includes investments in both multifamily and single-family residential rental properties, luxury developments, property technology through its LenX division, and mortgage services.

The company’s innovative approach to homebuilding is demonstrated by its “Everything’s Included” program, which integrates desirable features into homes at no additional cost. The initiative aims to improve customer satisfaction by providing modern amenities such as smart home technology and energy-efficient appliances right from the start.

Lennar (NYSE:LEN-B) reported solid results for the third quarter on September 19 as it achieved net earnings of $1.2 billion, or $4.26 per diluted share, which represented a 10% increase year-over-year and outperformed the analyst expectations by $0.63 per share. Moreover, the company’s revenue of $9.4 billion was up almost 8% year-over-year and exceeded the forecasts by $240 million.

Some major highlights include a 5% increase in new orders, totaling 20,587 homes, and a backlog of 16,944 homes valued at $7.7 billion. Deliveries rose by 16% to 21,516 homes, contributing to total revenues of $9.4 billion. Homebuilding operating earnings stood at $1.5 billion, with a gross margin of 22.5%. The company ended the quarter with $4.0 billion in cash and cash equivalents for homebuilding and no outstanding borrowings on its $2.2 billion revolving credit facility.

The company’s executive chairman, Stuart Miller highlighted the favorable economic conditions for homebuilders and mentioned the strong demand driven by solid employment and a chronic housing supply shortage. The company expects to deliver between 22,500 and 23,000 homes in the fourth quarter. It also remains committed to strengthening its balance sheet and pursuing its land-light strategy, with total liquidity exceeding $6.2 billion.