Lennar To Buy Back $1B In Stock; Street Sees 27% Upside
Lennar Corp. announced a stock repurchase program of up to 25 million shares, or about $1 billion. Shares of the homebuilder rose about 1% in Thursday’s extended trading session.
Lennar (LEN) said that the new share buyback program has no end date. The company had repurchased 14 million common shares for $781 million under its prior share repurchase authorization.
In addition to the buyback plan, the company’s board has announced a quarterly cash dividend of $0.25 per share, which will be paid on Feb. 12 to stockholders of record as of Jan. 29. Its quarterly dividend of $0.25 a share translates into a dividend yield of 1.3%.
Last month, Lennar reported upbeat 4Q results amid strong housing demand. The company’s 4Q earnings of $2.82 per share increased 32.4% year-over-year and exceeded analysts’ expectations of $2.37 per share. Fourth-quarter sales of $6.83 billion also topped the Street’s estimates of $6.65 billion, but fell 2% year-on-year. (See LEN stock analysis on TipRanks)
On Dec. 29, KBW analyst Jade Rahmani maintained a Buy rating and a price target of $98 (30.7% upside potential) on the stock. In a note to investors, Rahmani said, that Lennar’s “strong” 4Q results and guidance for 2021 “have set the stage for a promising year ahead.”
From the rest of the Street, the stock scores a cautiously optimistic outlook with the analyst consensus of a Moderate Buy based on 9 Buys and 4 Holds. The average analyst price target of $95.33 implies upside potential of about 27.1% to current levels. Shares have gained by 25.1% in over the past year.
Looking at TipRanks’ Hedge Fund Trading Activity tool, it appears that confidence in the stock is currently Very Negative as 14 hedge funds decreased their cumulative holdings in LEN by 4.8 million shares in the last quarter.
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