Lennar Earnings: Targets 10% Increase in Home Deliveries in 2024; Margin Upside if Rates Fall

No-moat Lennar’s fiscal fourth-quarter total revenue and adjusted earnings per share were solidly ahead of FactSet consensus estimates. Revenue increased 8% year over year to $11.0 billion (7% above consensus) and adjusted EPS grew 3% to $5.17 (13% above consensus). Management’s strategy to improve affordability through sales incentives and price reductions has attracted more buyers, and the company is targeting about a 10% increase in home deliveries next year, to 80,000. Considering Lennar’s willingness to adjust net pricing to drive a steady sales pace, we think management’s delivery target is achievable and implies solid market share gains for Lennar in 2024.