Lennar's stock is trading at around $89 a share. Financials are strong and indicators are positive. Lennar is set to report quarterly earnings tomorrow.

Overview

Lennar Corporation is a house-building business with a Miami postal address that is headquartered in the Florida census-designated town of Fontainebleau. Based on the number of homes sold in 2021, the company was the second-largest home construction company in the country.

Financials

Comparing the financial year which ended in November 2021 versus 2020. In 2021, revenue rose to $27.1bn from $22.5bn and gross profit rose to $5.5bn from $3.5bn. After tax and expenses, net income came in at $4.4bn for the year and EBITDA increased to $5.2bn from $3.2bn. As a result, earnings per share came in at $14.28, which was a 43% rise YoY. Furthermore, total liabilities went up by $376m but total assets went up by $3.27bn, which clearly offsets the rise in liabilities. Due to this, shareholder equity grew to almost $21bn in 2021 from $18.1bn in 2020.

Technicals

From a technical perspective, Lennar’s share price sits around $89.00 a share. Applying the Fibonacci retracement to the chart, towards the upside, resistance sits at $89.99 (50% fib) then at $96.46 (61.8% fib) then at $104.47 (76.4% fib). A break above the 76.4% fib level could see the price hike towards the stock’s all-time highs around $117, which were last seen this time last year. However, this would be more likely in the long term. Towards the downside, support sits at $83.51 (38.2%) then at $75.50 (23.6%) then a key support level at $62.55. A break below $63.55 may see the price slide towards the $55-$57 price range. Looking at the technical indicators, MACD is currently positive and so is RSI as it reads 57.

Summary

Overall, based on the financials of the company, they are pretty strong. Revenue and profit demonstrate gradual growth year-on-year, with EBITDA also indicating healthy operations. Earnings per share jumped by over 40%, and the total equity of the company continues to rise as assets overshadow liabilities. Looking at the technicals, the stock has been on an uptrend since Monday 24^th of October and resistance levels are specified above. Additionally, both indicators are positive suggesting there could be more potential for further upside. However, important for investors to note, tomorrow Lennar is expected to report its quarterly earnings. A positive report could provide the stock with momentum to edge higher, whereas a negative report may knock it towards the support levels below.