Hot Stock to watch: Lennar Corporation (NYSE: LEN)

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Lennar Corporation (NYSE: LEN) stock rose 0.73% on January 8th, 2020 after the company posted better than expected results for the fourth quarter of FY 19. Lennar has delivered a 16% increase in the number of home deliveries to 16,420 homes but posted a 7% decline in the average sales price of homes. Its backlog stood at 15,577 homes of a dollar value of $6.3 billion, which is down 4%. New orders were 13,089 homes, which is an increase of 23%. Home building gross margin was at 21.5%, in the fourth quarter. The company reported fourth-quarter earnings attributable to Lennar of $674.3 million compared to $608.6 million in the prior year.

Moreover, in April 2019, the Company had amended the credit agreement governing its unsecured revolving credit facility to increase the commitments from $2.3 billion to $2.4 billion and extend the maturity one year to April 2024. In the fourth quarter of 2019, the Credit Facility commitments were increased by $50 million to total commitments of $2.5 billion.

LEN in the fourth quarter of FY 19 has reported the adjusted earnings per share of $2.13, beating the analysts’ estimates for the adjusted earnings per share of $1.90, according to Analysts polled by FactSet . The company had reported the adjusted revenue growth of 8 percent to $6.97 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $6.51 billion.

Lennar expects fiscal 2020 deliveries to be in the range of 54,000 to 55,000 homes, homebuilding gross margin percentage is expected to be in the range of 20.5% to 21.0% and cash flows is expected to continue to accelerate. The company has only $600 million of senior notes due in 2020, which it will opportunistically deploy excess cash flow for the repurchase additional debt and return capital to shareholders.

Additionally, during the first quarter of 2019, the Company has authorized to repurchase up to the lesser of $1 billion in value, or 25 million in shares, of the Company’s outstanding Class A or Class B common stock. As per this repurchase program, the Company had repurchased 1.7 million shares of its Class A common stock for $98.2 million at an average per share price of $58.99 during the fourth quarter of 2019 and 9.8 million shares of its Class A common stock for $492.9 million at an average per share price of $50.41 during the year ended November 30, 2019.

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