LEN
Lennar Corporation
$90.30
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 53.8% below fair value
You pay
$90.30
Bear
$150.10
Fair
$195.28
Bull
$240.45
Bear
$150.10
+66.2%
$14.27 × 14x + net cash
Fair
$195.28
+116.3%
$14.27 × 18x + net cash
Bull
$240.45
+166.3%
$14.27 × 22x + net cash
Key Value Driver
Through-cycle normalized EPS ($14.27)
Implied Market Multiple
6.3x
Summary
Our base-case estimate uses Normalized Earnings × Cycle Multiple. We then blend that result with the average analyst price target of $99.71 from 50 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $195.28 per share.
Warnings
Wall Street's average price target is $99.71 (from 50 analysts). Our estimate is 147% 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