LEN
Lennar Corporation
$84.56
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 55.6% below fair value
You pay
$84.56
Bear
$146.50
Fair
$190.60
Bull
$234.69
Bear
$146.50
+73.3%
$14.27 × 14x + net cash
Fair
$190.60
+125.4%
$14.27 × 18x + net cash
Bull
$234.69
+177.5%
$14.27 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($14.27)
Implied Market Multiple
5.9x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $86.33 from 50 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $190.60 per share.
Warnings
Wall Street's average price target is $86.33 (from 50 analysts). Our estimate is 186% above the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing