Why This Lennar Analyst Is No Longer Bearish After $6B Spinoff Plan

Shares of Lennar Corp LEN have been in focus, with insufficient home supply driving record prices in the US.

While the stock price has risen, there are no catalysts to adjust earnings estimates, according to Wedbush.

The Lennar Analyst: Jay McCanless upgraded the rating for Lennar from Underperform to Neutral, while keeping the price target unchanged at $144.

The Lennar Thesis: Lennar is considering a spinoff of its land assets.

The plan, announced by the company during its fiscal second-quarter earnings call, could be the next catalyst for the stock, McCanless said in the upgrade note.

Check out other analyst stock ratings.

McCanless expects the potential size of the deal to be between $6 billion and $8 billion.

"Lennar has released no details, but we think Landspin might be a vehicle for harder to entitle parcels that require more development time than the deals Lennar currently buys from land banking partners," the analyst wrote.

The company's fiscal 2024 gross margin outlook of 23.3% "may have more downside than upside risk," McCanless further stated.

LEN Price Action: Shares of Lennar had risen by 0.41% to $143.22 at the time of publication on Tuesday.

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