Lennar, Apollo Receive Downgrades

NEW YORK ( TheStreet) -- Shares of Lennar ( LEN) and Apollo Group ( APOL) were downgraded by TheStreet Ratings on Thursday.


The homebuilder was downgraded to hold from buy at TheStreet Ratings.

"The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance," TheStreet Ratings wrote. "However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share."

Lennar reported first-quarter earnings this week of $15 million, or 8 cents a share, which beat analysts' estimates of 4 cents.

Shares of Lennar hit a 52-week high Wednesday of $28.28. The stock's 52-week low of $12.14 was set on Oct. 4.

Lennar has an estimated price-to-earnings ratio for next year of 19.91 times; the average for home construction companies is 24.47. For comparison, D.R. Horton ( DHI) has a lower forward P/E of 18.99; Toll Brothers' ( TOL) forward P/E is 34.39.

Thirteen of the 25 analysts who cover Lennar rated it hold. Ten analysts gave the stock a buy rating and two rated it sell.

TheStreet Ratings gives Lennar a C+ grade. The stock has risen 40.81% year to date.

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