Lennar $LEN just reported mixed results and suffered its 7th consecutive negative earnings reaction.
This is one of the largest homebuilders in the United States.
The company operates across 26 states, with significant exposure to high-growth Sun Belt markets. Florida, Texas, and California are among its most important regions.
Their business model is simple: build quality homes, control costs, and manage supply carefully.
But that model is being tested...
Affordability challenges are weighing on buyers.
High mortgage rates, rising costs, and weak pricing power are all cutting margins.
This is still a heavyweight in housing.
However, until the market feels better about margins and demand, investors aren’t giving it the benefit of the doubt.
So what else did we learn from yesterday's earnings reactions? Let’s dive into the details.
Here are the latest earnings stats from the S&P 500 👇
*Click the image to enlarge it
Jabil $JBL had the best reaction score after reporting a double beat.
The company reported revenues of $7.83B, versus the expected $7.06B, and earnings per share of $2.55, versus the expected $2.31.
Lennar $LEN had the worst reaction score after reporting mixed results.
The company reported revenues of $8.38B, versus the expected $8.18B, and earnings per share of $1.81, versus the expected $1.94.
Now let's dive into the data and talk about what happened with these reports 👇
JBL has been rewarded for 4 consecutive earnings reports 📈
Jabil rallied 8.9% after this earnings report, and here's why:
The Intelligent Infrastructure segment grew revenues by 51% year-over-year to $3.4B. This was driven by strong demand in AI-related cloud and data center infrastructure business, including power, cooling, and server rack solutions.
They announced a new $500M investment over the next several years to expand their U.S. footprint with a new facility in the Southeastern U.S.
In addition to the great quarter, the management team issued better-than-expected forward guidance.
This company is crushing it, and the market keeps rewarding them. It has been one of the best performers in the S&P 500 this year, rallying over 40%.
The stock is trading at fresh all-time highs and clearing a key Fibonacci extension level.
We expect to see more new highs and relative strength for the foreseeable future.
The key level to watch in JBL is 195. The bulls are in complete control if the price is above that level.
LEN has been punished for 7 consecutive earnings reports 🩸
Lennar fell 4.5% after this earnings report, and here's why:
Net earnings fell 50% year-over-year to $477M.
Gross margins on home sales declined to 17.8% from 22.6% last year, and the average sales price of homes decreased by 9% to $389,000 from $426,000 in the prior year quarter.
To make the bad quarter worse, the management team's forward guidance wasn't good.
This is the second-largest homie in the U.S. and one of the most economically sensitive components of the S&P 500.
For it to be performing this poorly is a significant concern for the bulls.
While yesterday's earnings reaction wasn't horrific, it was still the 7th consecutive earnings report to punish the stock.
Since peaking in September, the price has suffered a nearly 50% drawdown. It has been a brutal 9 months.
Unless something materially changes here, we expect LEN to continue trending lower for the foreseeable future.
Our bias would shift higher if the bulls reclaimed the VWAP anchored to the all-time high.
Thank you for reading.
- The Beat Report Team
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