Lennar's asset-light strategy, post-Millrose REIT spin-off, boosts flexibility, reduces capital intensity, and frees cash for core homebuilding growth. Despite cyclical headwinds and falling margins, Lennar maintains strong cash flow, low debt, and attractive valuation at 12.6x FWD P/E, cheaper than peers. Housing shortage persists in the U.S.; if monetary policy eases, demand and Lennar's share price should recover, offering a favorable risk/reward profile. Management expects margins to stabilize and delivery volumes to ramp in H2 2025, supporting guidance for $8 EPS and $34-35B revenue for the year.

Lennar: Valuation Disconnect With Earnings Potential

Lennar's asset-light strategy post-Millrose REIT spin-off enhances flexibility and cash flow, supporting core homebuilding growth. Despite cyclical challenges, the company maintains a strong valuation at 12.6x FWD P/E, lower than peers, with management expecting stabilized margins and increased delivery volumes in H2 2025.