Zacks Investment Research upgraded shares of Lennar Corp -A (LEN) from NEUTRAL to OUTPERFORM on January 09, 2013, with a target price of $49.00.
Based on the fast improving industry fundamentals, we have upgraded our recommendation on Lennar from Neutral to Outperform. Lennar is gaining momentum with steadily improving housing conditions, rising home prices, declining inventories and improving consumer confidence. Lennar appears most well positioned to take advantage of the recovery in the housing market. Lennar has witnessed solid year-over-year growth in new home orders, average selling prices and home closings in all the three quarters of 2012. Margins have also been above average despite rising costs, driven by strong operating leverage. Lennar appears confident of significant growth in the rest of the fiscal year and even thereafter. We believe that the company is performing better than its peers by increasing sales prices, reducing incentives, improving volumes and by making opportunistic land acquisitions. Moreover, Lennar's focus on the quality of communities instead of quantity also benefits its margins and new sales orders.
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