Is Lennar Corporation (LEN) Among The Stocks That Could Surge From LA Wildfires Recovery Efforts?

We recently compiled a list of the 7 Stocks That Could Surge From LA Wildfires Recovery Efforts. In this article, we are going to take a look at where Lennar Corporation (NYSE:LEN) stands against the other stocks.

Los Angeles wildfires continue to wreak havoc in the region, taking precious lives and destroying thousands of homes. The LA County Sheriff announced that nearly 10,000 structures were lost in the wildfires, but this number has already gone up and is expected to rise further as the authorities struggle to contain the fires.

Once the dust settles, there will be a huge demand for reconstruction of properties destroyed in the wildfires. The Biden administration has already promised federal reimbursements for the recovery efforts going on. Homebuilders could possibly benefit from this government support and the resulting spending surge as well.

To come up with the list of 7 stocks that could surge from LA wildfire recovery efforts, we considered stocks with a market cap of at least $4 billion.

A construction crew installing roof tiles on a newly built row home.

Lennar Corporation (NYSE:LEN)

Lennar Corporation stock’s sell-off has been more pronounced than its peers. The stock is down 32% since September and this poor performance is what sets it up nicely for a possible outperformance in 2025. Analysts at RBC Capital Markets believe the stock has already fallen so low that the risk-reward ratio aligns well with investors who want to buy the company’s stock.

LEN is planning to get rid of its land assets by spinning them off into a new REIT company. Investors will receive shares of this new company, increasing shareholder value through possible future dividends. Future expansions of this new REIT will also have no financial implications for LEN, helping it maintain its strong balance sheet.

The improving cost management as a result of this spin-off will also help resolve LEN’s inventory problems, helping it improve its return on equity. These short-term catalysts set up the company well for a 2025 outperformance.

Overall LEN ranks 5th on our list of the stocks that could surge from LA wildfires recovery efforts. While we acknowledge the potential of LEN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as LEN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.