News

Lennar Corporation LEN is set to report its second-quarter fiscal 2026 results on June 11, after the closing bell.

In the last reported quarter, the company’s adjusted earnings and total revenues missed the Zacks Consensus Estimate by 8.3% and 3.1%, respectively. On a year-over-year basis, the metrics moved down 58.9% and 13.2%, respectively.

Lennar’s earnings missed estimates in each of the trailing four quarters, with a negative average surprise of 6.3%.

How are Estimates Placed for LEN Stock?

The Zacks Consensus Estimate for earnings per share (EPS) has moved south to $1.23 from $1.24 over the past seven days. The estimated figure indicates a decline of 35.3% from earnings of $1.90 per share reported in the year-ago quarter.

The consensus mark for total revenues is pegged at $8.07 billion, indicating a 3.6% decline from the year-ago figure of $8.38 billion.

Lennar Corporation Price and EPS Surprise

Factors Likely to Shape Lennar’s Q2 Results

Revenues

The fiscal second quarter of Lennar is expected to have witnessed a downturn in its top-line performance due to the ongoing affordability issues faced by homebuyers in the United States, given the sudden spike in mortgage rates. As of Freddie Mac, the 30-year fixed mortgage rate ranged between 6.00% and 6.53% between March 2025 and May 2026. Besides inflated rates, U.S. homebuyers struggle with lower income opportunities and growing global uncertainties, which are underlying reasons for the struggling housing market of the country.

During the quarter, even though the home sales volume is likely to have normalized to some extent, the reduced average selling price (ASP) on home sales pressured the revenues down. Besides, even if Lennar engaged in extensive incentive offerings to ease the financial pressures of the potential buyers in the quarter, the softness in demand is expected to have lingered.

For the fiscal second quarter, Lennar expects home deliveries between 20,000 units and 21,000 units, with ASP on homes delivered between $370,000 and $375,000. These values compare with 20,131 homes sold in the year-ago quarter at an ASP of $389,000.

Our model expects home deliveries for the quarter to be 20,316 units at an ASP of $372,870, indicating a year-over-year improvement of 0.9% and a decline of 4.1%, respectively. Besides, our model predicts Homebuilding revenues (contributed 95.2% to first-quarter fiscal 2026 revenues) to decline 2.6% year over year to $7.64 billion.

Nonetheless, LEN’s technology-driven transformation efforts to unlock scalable efficiencies, reduce customer acquisition costs and modernize its entire operating model are expected to have eased the pressures to some extent in the fiscal second quarter.

Earnings & Margins

The company’s bottom line is expected to have weakened significantly during the fiscal second quarter compared with a year ago because of its increased incentive offerings and lower home delivery ASP implemented to boost sales volume. In an inflated mortgage rate scenario and lower household income opportunities, Lennar chose the path of sacrificing its margins to boost home delivery numbers, which is likely to be adverse in the near term.

For the fiscal second quarter, Lennar expects the home sales gross margin to be between 15.5% and 16%, down from 17.8% reported a year ago. It also expects EPS in the range of $1.10-$1.40 for the quarter to be reported.

Moreover, Lennar’s technology investments are likely to have put pressure on the margins as the near-term efficiency yielded from them is immaterial and represents a significant drag on operating leverage. Heightened investments, alongside higher marketing and selling expenses, are expected to have increased the selling, general and administrative (SG&A) expenses of the company in the quarter to be reported. Lennar expects SG&A expenses (as a percentage of home sales) to be between 8.9% and 9.1%, up year over year from 8.8%.

Orders & Backlog

For the fiscal second quarter, LEN expects new home orders between 21,000 units and 22,000 units, down from 22,601 units reported a year ago. Our model predicts the same metric to be 21,908 units, reflecting a 3.1% year-over-year decline.

We expect backlog units to be up 10.6% year over year to 17,180 units, with potential housing revenues up 2.6% to $6.65 billion.

What Our Model Unveils for Lennar

Our proven model does not conclusively predict an earnings beat for Lennar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.

LEN’s Earnings ESP: The company has an Earnings ESP of -3.25%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

LEN’s Zacks Rank: The stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

Here are some companies in the Zacks Construction sector, which per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

Sterling Infrastructure, Inc. STRL has an Earnings ESP of +9.90% and a Zacks Rank of 1.

Sterling’s earnings topped estimates in each of the last four quarters, with an average surprise of 29.1%. The company’s earnings for the second quarter of 2026 are expected to rise 76.6%.

Comfort Systems USA, Inc. FIX currently has an Earnings ESP of +3.20% and a Zacks Rank of 1.

Comfort Systems’ earnings beat estimates in each of the last four quarters, the average surprise being 39.3%. The company’s earnings for the second quarter of 2026 are expected to grow 59%.

Quanta Services, Inc. PWR currently has an Earnings ESP of +1.66% and a Zacks Rank of 1.

Quanta’s earnings have topped in each of the trailing four quarters, the average surprise being 10.3%. The company’s earnings for the second quarter of 2026 are expected to grow 31.9%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.