Lennar Earnings Beat Views Despite Drop; Housing Shortage Provides Long-Term Tailwind for Builders

Warren Buffett-backed Lennar reported better-than-expected Q3 earnings and revenue. LEN stock fell Friday.
Lennar earnings dropped 23% but beat views. Revenue fell 3% but topped estimates. Home deliveries increased 8%.
The homebuilder stock rally has paused for 9 weeks, leaving some in base patterns. Heavy incentives could hurt earnings.
U.S. has a housing shortage of 5.5M homes. New construction hasn't kept pace with population growth. Bullish long-term for builders.
Existing home sales fell in July as high mortgage rates kept owners from selling. New home sales rose with demand steady. Fed rate hikes cool housing demand.

investors.com

Relevant topic timeline:

8/28/2023

Warren Buffett may be bracing for a recession – and Michael Burry's latest big short is a 'good move,' says top economist Steve Hanke

Warren Buffett and Michael Burry are preparing for a market downturn and recession by selling stocks and increasing their cash holdings, according to economist Steve Hanke. Berkshire Hathaway sold an impressive $8 billion of stocks in Q2 and added to its cash pile, while Burry's Scion firm placed bets against the S&P 500 and Nasdaq-100 valued at $1.6 billion.

9/4/2023

Berkshire Hathaway stock could crash 99% and Warren Buffett would still have trounced the S&P 500

Warren Buffett's Berkshire Hathaway has outperformed the S&P 500 even if its stock price crashed by 99%, with a gain of nearly 3,800,000% between 1965 and 2022 and stock currently at record highs.

9/10/2023

Buffett Bets on Homebuilders Despite Housing Headwinds

Warren Buffett's recent investments in homebuilding companies D.R. Horton, Lennar, and NVR during a time of high inflation and rising interest rates suggest a contrarian move with potential for profitability based on the long-term outlook of falling interest rates and increased affordability of home ownership.

10/3/2023

Stocks Sink as Rising Yields and Hawkish Fed Outlook Weigh on Markets

Stocks on Wall Street fell in early trading on Tuesday as rising Treasury yields and hawkish comments from Federal Reserve policymakers dampened investor sentiment. The tech-heavy Nasdaq Composite was down over 1.4%, the Dow Jones Industrial Average tumbled about 0.9%, and the S&P 500 dropped almost 1.1%. Additionally, the number of open jobs in the US increased in August, raising questions about whether the job market is cooling fast enough to satisfy the Federal Reserve as it considers more interest rate hikes to combat inflation.

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Posted 9/14/2023, 9:28:00 PM