The investment firm upgraded Lennar to "conviction buy" from "neutral" with a price target of $48 from $38. Analysts said they believe the stock has been valued almost exclusively for its core homebuilder business, while little consideration has been paid to its less-profitable but high-potential side income streams. The firm revised its 2014-15 earnings estimate 2% to 9% above consensus.
On Wednesday, Lennar announced it had priced an underwritten public offering of $400 million senior notes due June 2019 with an interest rate of 4.5%. Net proceeds from the transaction will be used for working capital and general corporate purposes.
TheStreet Ratings team rates LENNAR CORP as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate LENNAR CORP (LEN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows: