Advertisement
Canada markets closed
  • S&P/TSX

    22,167.03
    +59.95 (+0.27%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CAD/USD

    0.7380
    -0.0006 (-0.08%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • Bitcoin CAD

    94,769.78
    -645.50 (-0.68%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • RUSSELL 2000

    2,124.55
    +10.20 (+0.48%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ

    16,379.46
    -20.06 (-0.12%)
     
  • VOLATILITY

    13.01
    0.00 (0.00%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • CAD/EUR

    0.6840
    -0.0003 (-0.04%)
     

This one number is crucial for Lennar

Lennar Group (LEN) reports its 2015 fiscal second-quarter figures on Wednesday. The company has continued to perform well, providing a capital gain of 8.55% year-to-date relative to the S&P 500 (^GSPC) of 2.48%. Fundamentally, Lennar is in a good position to capitalize on a strengthening U.S. economy and a continuation in low interests.

Estimize is predicting an earnings per share figure of $0.69 relative to Wall Street predictions of $0.65. Estimize also assumes higher revenues than Wall Street of $2.089 billion compared to $2.049 billion. The homebuilder has had a tendency to beat Wall Street figures consistently over the past 24 months.

U.S. new single-family houses sold data is released on Tuesday morning and the figure will likely give some indication of how Lennar will report on Thursday. Lennar’s revenues are significantly influenced by new single housing sales. Lennar says its “homebuilding activities primarily include the construction and sale of single-family attached and detached homes to first-time, move up, and active homebuyers.”

Historically, Lennar’s revenues have been positively correlated with movements in U.S. new single-family home sales.

ADVERTISEMENT

Estimize predicts a 2.07% month-over-month growth number for U.S. new single family houses sold in May. If correct, Lennar’s revenues will likely experience a continuation in positive revenue growth. The Estimize community is predicting an increase of 27% in revenues this quarter compared to the previous one.

Leading into its result, Lennar is trading with a trailing price-to-traily earnings multiple of 16.62 tunes compared to its five-year average of 23.86 times. The stock is currently trading at discounted levels relative to its history.

The data on U.S. new single-family houses sold will likely affect the sentiment surrounding a number of stocks including Lennar and its peers PulteGroup (PHM) and DR Horton (DHI). Further, the numbers published may well be a precursor of what is expected from Lennar in terms of revenues for the second-quarter report. This week will be an interesting one for Lennar group. Active investors with vested interests in Lennar should pay attention to the housing data released on Tuesday and analyze Lennar’s quarterly when it is published on Wednesday.