The future of lennar - maintaining a market-leading position, in the upcoming challenging years

• Autor(a) principal: Teixeira, Gonçalo Fernandes Coelho de Canduzeiro
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/157141
• topic: Homebuilding; Pricing; Strategy; Housing; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

This Master Thesis's final objective is to find the appropriate valuation for Lennar Corporation, the second-largest homebuilding company in the USA. On a moment with a risky economic conjuncture marked by uncertainty in global markets, with inflation at abnormally high levels, historically high levels of interest rates not observed since the last financial crisis, worrying and disruptive geopolitical tensions, especially with the ongoing Russian-Ukraine War, and still recovering from the Covid-19 outbreak that stagnated the economy and disrupted supply chains, we can expect challenging upcoming years, especially in such a cyclical industry, such as the homebuilding sector. Nonetheless, we expect Lennar to be able to maintain or even increase its market-leading position, given its size and long-term experience consolidating a strong, well-known, and trusted brand in the homebuilding market. Additionally, the competitive housing prices offered by Lennar targeting medium-level affordable housing, combined with efficient cost management and investments in new technologies are key cornerstones for the company to maintain its leading position in the market. From all of these, and based on the analysts’ estimates, we issue a Buy recommendation on Lennar Corporation, reaching a price target FY 2023 of $134.57, bearing a total annualized shareholder return of more than 20%.