Lennar (LEN) - Get Lennar Corporation Class A Report  were rising Thursday after shares of the homebuilder were upgraded to outperform from neutral at Wedbush.

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."

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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.