Lennar: A Builder’s Chance

One gathers the recent unpleasantness in the growth stock sector wasn’t entirely unexpected. A rather tiresome bubble, really. All that artificial intelligence… one does wish people would be, well, intelligent about where they put their money. It’s left a few perfectly decent value stocks looking rather overlooked, hasn’t it? And frankly, a bit of a correction was overdue.

The irony, naturally, is exquisite. All this fuss over overvalued tech, and a perfectly serviceable house remains stubbornly…expensive. One wouldn’t have thought it required a genius to spot that, would one? But necessity, as they say, is the mother of invention – and a rather pressing need for somewhere to live. Estimates vary, naturally. Somewhere between two and eight million houses short, depending on who one asks. A rather frightful statistic, but hardly a surprise.

Lennar (LEN +4.71%), a name that doesn’t exactly set the pulse racing, is, therefore, worth a glance. One wouldn’t suggest it’s glamorous, but then, solid investments rarely are. It’s a builder, darling, not a dream.

Yes, that Lennar

Don’t strain yourself looking for a misprint. The shares are currently trading some 36% below their peak, which, while not ideal, suggests a certain…underestimation of the situation. Homes, you see, remain stubbornly priced, but people still need them. A rather basic equation, really.

Data from Zonda suggests a modest uptick in demand for new builds in 2026. A shallow recovery, admittedly, but a recovery nonetheless. The U.S. Census Bureau concurs. Progress, however glacial, is still progress. One mustn’t be a complete pessimist, you know.

There’s even talk – and one takes these things with a grain of salt, naturally – of some sort of industry-backed rent-to-own scheme. Apparently, Lennar is rather keen on the idea. One imagines it would keep them busy. Though “Trump Homes,” as someone rather unimaginatively suggested, seems a bit…vulgar, doesn’t it? Something a little more discreet would be preferable.

Revenue growth isn’t exactly leaping off the page this year, following a slight dip in 2025. But forecasts suggest a rather respectable 5% increase in 2027, coinciding with the Federal Reserve’s anticipated easing of interest rates. A little less expensive money will, naturally, make all the difference.

As cheap as it’s going to get

So, what’s the value, you ask? The shares are trading at less than 17 times 2026’s expected earnings, and a mere 13 times next year’s projected profit of $8.82. Not dirt cheap, admittedly, and one must be prepared for a little volatility. But it’s a perfectly reasonable price, and about as little as one can expect to pay for a company that might just surprise everyone.

Naturally, most analysts remain unconvinced. The current price is above their consensus estimate of $104.42, and the stock has struggled to maintain any sort of sustained recovery. One suspects they’re simply lacking in imagination.

But then, one can’t expect to find bargains where everyone else is clamoring. The crowd, darling, is rarely right. It’s a tiresome cliché, but a cliché nonetheless. And in the world of finance, as in life, one must occasionally be prepared to go against the grain. It’s the only way to have any fun.

2026-02-11 00:03

Yes, that Lennar

As cheap as it’s going to get

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