TLDR
- Berkshire Hathaway raised its Lennar stake to 11% after adding to its position last week.
- Lennar stock opened at $82.07 on Tuesday, below Wall Street’s average price target of $81.
- Analysts rate the stock a consensus “Reduce,” with nine sell ratings and only one buy.
- Third-quarter earnings missed estimates, with EPS of $1.23 versus the $1.29 expected.
- Lennar declared a $0.50 quarterly dividend, a 2.4% annualized yield, payable October 22.
Lennar (LEN) stock opened at $82.07 on Tuesday, sitting below Wall Street’s average price target of $81. Berkshire Hathaway has been the main story around the homebuilder lately, and its buying keeps growing.
Berkshire pushed its Lennar stake to 11% last week. That comes after a purchase that followed several prior buying sessions.
The position is now worth more than $2 billion. Berkshire has doubled its Lennar holding since the end of June.
Crossing the 10% ownership line matters. It requires Berkshire to disclose new purchases within two business days, something the famously quiet investor usually avoids.
Berkshire’s buying has helped Lennar’s stock hold up better than rivals. Industry leader D.R. Horton fell 1.5% on a day Lennar slipped just 0.2%.
Berkshire’s Housing Playbook
Berkshire already owns Clayton Homes, the top manufactured housing builder in the country. Clayton could be worth $25 billion or more on its own, based on current earnings.
Clayton controls roughly half the manufactured housing market. Champion Homes and Cavco Industries split most of the rest between them.
Berkshire also bought Taylor Morrison in July for $8.5 billion, including debt. CEO Greg Abel has pushed to expand Clayton’s site-built home business since that deal closed.
Lennar is controlled by CEO Stuart Miller, who holds most of the company’s super-voting Class B stock. Any takeover attempt would need his approval.
Lennar’s market value sits near $20 billion, a figure Berkshire could easily afford. Neither company has commented on longer-term plans for the stake.
Earnings Miss And Analyst Views
Lennar’s most recent quarter fell short of expectations. Earnings per share came in at $1.23, missing the $1.29 consensus.
Revenue totaled $8.05 billion, below the $8.32 billion analysts forecast. That figure was down 9% from a year earlier.
Seventeen research firms currently cover Lennar. Nine rate the stock a sell, seven a hold, and just one a buy.
Citigroup cut its price target to $85 from $88 this month. BTIG kept a sell rating with a $63 target, while Argus remains more upbeat at $108.
Lennar’s stock has fallen almost 20% this year. It trades for less than half its 2024 high near $185.
The stock carries a market cap of $19.77 billion and a P/E ratio of 15.51. Its 12-month range runs from $75.70 to $133.76.
Lennar also declared a quarterly dividend of $0.50 per share of stock. That payout equals a 2.4% annualized yield, with payment set for October 22.
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