Homebuilding Stock Moves Higher Before Earnings

The stock tends to move higher after earnings

Deputy Editor
Sep 14, 2023 at 10:06 AM
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The shares of Lennar Corporation (NYSE:LEN) are 1.4% higher at $117.55 this morning, earlier topping $117.87 as investors prepare for the homebuilder's third-quarter earnings report, which is due out before tonight's close. Wall Street expects Lennar's in earnings to fall to $3.51 per share, with revenue falling to $8.45 billion. 

The equity does have a pretty upbeat post-earnings history over the past two years, nabbing five next-day wins, compared to just three losses. The stock has averaged a move of 2.2% after these eight instances, regardless of direction. This time around, the options pits are pricing in a larger 5.9% next-day move for the stock. 

Speaking of options pits, Lennar's are seeing an unusual amount of bullish activity today. So far, 1163 calls have crossed the tape, which is triple the intraday average. The most popular contract is the September 120 call, which expires tomorrow, followed by 123 call in the same monthly series. 

On the charts, the security is recovering from a marginal week-to-date loss, down 1.4% since Monday, though it could be seeing support emerge at the 20-day moving average. Should the homebuilding stock move upward, in-line with options traders' expectations, LEN could overtake the +30% year-to-date level. 


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