Lennar Corporation (NYSE: NYSE:LEN), a leading homebuilder with a market capitalization of $47.12 billion, has expanded its credit facility, as per the latest SEC filings. The credit facility, managed by JPMorgan Chase (NYSE:JPM) Bank, N.A., BofA Securities, Inc., and Mizuho (NYSE:MFG) Bank, Ltd., includes a $625 million accordion feature that could potentially increase the borrowing capacity to $3.5 billion. The facility is a revolving loan that allows Lennar to borrow, repay, and re-borrow funds.
In conjunction with this amendment, several of Lennar's wholly owned subsidiaries, mainly in the homebuilding sector, have entered into a guarantee agreement. These subsidiaries will guarantee the company's obligations under the newly revised credit agreement.
The expansion of the credit facility reflects Lennar's ongoing efforts to secure strong financial backing for its operations and growth initiatives. The company, headquartered in Miami, Florida, continues to maintain a significant presence in the residential construction industry, with total debt of just $4.04 billion and a 47-year track record of consistent dividend payments.
In other recent news, Lennar Corporation maintained its Outperform rating following the announcement of its acquisition of Rausch Coleman Homes. The acquisition, expected to close in Lennar's first fiscal quarter, will enhance the company's footprint in new markets such as Arkansas, Alabama, Oklahoma, Kansas, and Missouri. The transaction is seen positively due to its high return potential and asset-light nature.
Lennar's third-quarter 2024 earnings exceeded expectations with adjusted diluted earnings per share of $3.90 and home closings of 21.4 thousand units. However, the company's gross margin of 22.5% fell below expectations. Analyst firms such as Evercore ISI and BofA Securities have adjusted their outlook on Lennar following these developments.
Evercore ISI reduced its price target from $240.00 to $236.00 but maintained an Outperform rating. BofA Securities kept a Neutral rating with no change in its price target of $190.00. Citi also maintained a Neutral stance but increased Lennar's stock target to $196 from $164.
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