Lennar (LEN) Stock is the 'Chart of the Day'

NEW YORK (TheStreet) -- Lennar (LEN) shares are up 1.4% to $51.77 in afternoon trading on Thursday after the home builder's price target was upgraded to $54 from $53 by analysts at Barclays who maintained its "overweight" rating.

Analysts at the firm also raised the company's full year EPS estimate to $3.24 from $3.10 and raised its 2016 earnings forecast to $3.94 from $3.50.

The upgraded outlook is a result of the firm's belief that the housing market is in good shape with the first time buyer market showing signs of recovery.

Insight from TheStreet research team

Lennar is the subject of today's Trifecta Stocks 'Chart of the Day' analysis. Here is what analysts Bryan Ashenberg and Bob Lang had to say about the stock.

Lennar reported some stellar earnings Wednesday morning and managed to trade well in the face of a very mean tape. While we saw the broader market slide, this stock gapped higher and held onto some nice gains. Although it closed off the highs, the chart seems to show there is room to run.

The Relative Strength may have peaked, but there is a positive divergence in the Moving Average Convergence Divergence, which shows a buy signal. As the stock trades above the Bollinger Bands now, this could blossom into a fat tail trade. One more up day and we could see this head sharply higher.

DISCLOSURE: Trifecta Stocks has no position in LEN. This Alert is a technical analysis of the company's chart, and we are not taking any action in the stock at this time.

-Bryan Ashenberg and Bob Lang, 'Chart of the Day: LEN', 6/25/2015

TheStreet Ratings team rates LENNAR CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LENNAR CORP (LEN) a BUY. This is driven by a few notable 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, solid stock price performance, impressive record of earnings per share growth, reasonable valuation levels and compelling growth in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.6%. Since the same quarter one year prior, revenues rose by 21.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • LENNAR CORP has improved earnings per share by 42.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, LENNAR CORP increased its bottom line by earning $2.81 versus $2.14 in the prior year. This year, the market expects an improvement in earnings ($3.15 versus $2.81).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Household Durables industry and the overall market, LENNAR CORP's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: LEN Ratings Report

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