Analyst Jay McCanless also raised his price target on Lennar to $62 from $50. The analyst sees improving sales and said Lennar should benefit from lower interest rates and continued demand for affordable housing in western markets.
McCanless cited a rebound in California -- where about 15% of Lennar's communities are based. California should "provide a dual benefit of higher volume and average selling prices" for both lennar and the industry, the analyst wrote.
MorningStar on Wednesday named Lennar one of its top four undervalued housing-related picks. MorningStar said Lennar "is well positioned to benefit from increased demand from first-time buyers and its emerging multifamily business, and has the widest margin of safety among our homebuilder coverage."
The stock has 18 buys, one hold and no sell ratings, along with a consensus target price of $59, according to analysts surveyed by Bloomberg.
Lennar reports quarterly earnings on June 25.