Options Traders Blast Lennar Stock After Earnings Miss

Options volume is running at 7 times what is typically seen

Digital Content Manager
Dec 16, 2021 at 10:19 AM
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The shares of Lennar Corporation (NYSE:LEN) are down 3.7% to trade at $108.90 at last check, after the homebuilding concern posted fiscal fourth-quarter earnings of $3.91 per share -- much lower than the $4.15 per share Wall Street anticipated. The company blamed the disappointing results on the high cost of lumber, supply chain woes, as well as labor and raw materials shortages, which delayed home deliveries despite strong demand.

Drilling down to today's options activity, 3,337 calls and 2,803 puts have already crossed the tape, which is seven times the intraday average. Most popular is the December 105 put, followed by the 115 call in the same series, both of which expire at tomorrow's close.

A broader look shows the options pits have been overwhelmingly optimistic, according to LEN's 50-day call/put volume ratio of 2.01 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 94% of readings from the past 12 months, meaning long calls have been getting picked up at a much faster-than-usual pace in the last two months.

The brokerage bunch is mostly optimistic towards Lennar stock, too. Of the 12 analysts in coverage, seven carry a "buy" or better rating, while five say "hold." Plus, the 12-month consensus target price of $125.50 is a substantial 16.8% premium to the equity's current perch.

Lennar stock was enjoying a boost the last time we checked in on it, after receiving an upgrade from Goldman Sachs. The shares are now pacing for their worst day in roughly seven months, though, and are testing support from the 40-day moving average. Year-over-year, LEN is still up 44.8%.




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