LENNAR CORP /NEW/ (LEN): Results of Operations and Financial Condition

Berkshire Hathaway increased its Alphabet stake 83% to about 106 million shares, worth nearly $38 billion at June 30, after agreeing to buy $10 billion of Alphabet stock in a June private placement and buying 19.6 million shares on the open market, according to a portfolio disclosure. Berkshire also bought net $20 billion of stocks in Q2.

Berkshire Hathaway increased its Alphabet stake in Q2, owning about 106 million shares worth $37.9B at June 30, up 83%, making Alphabet its third-largest U.S. equity holding, according to a regulatory filing. Berkshire also raised Delta Air Lines shares 44% to 57.3M ($5.4B) and boosted Lennar and added a small D.R. Horton position. Berkshire reported nearly $20B net equity purchases and cash of $365.5B.

Lennar reported Q2 2026 average home sales price of $371,000, down from $389,000 a year earlier, attributing the decline to about 12.9% buyer incentives and base-price adjustments. D.R. Horton reported fiscal Q3 ended June 30 average closing price about $362,000, with 23,983 homes closed. UWM Holdings shares fell after a Q2 net loss of $451.9 million and a $2.05 billion equity investment.

S&P Global Ratings revised Lennar Corp.’s outlook to stable from positive and affirmed its BBB issuer credit rating, citing declining revenue and compressed margins tied to affordability constraints and higher mortgage rates. For six months ended May 31, 2026, homebuilding revenue fell 8% to $13.9B and gross margins to ~15.4% from 18.2%.

Keefe Bruyette & Woods analyst Jade Rahmani upgraded Toll Brothers to outperform and downgraded Lennar to sell, citing tighter affordability from higher gasoline, inflation and mortgage rates, while wealthier buyers keep spending. Rahmani said Toll’s ~8% incentives and >$1M average home price support margins; Lennar’s incentives are ~14% via mortgage buydowns. Toll shares are up 8.9% YTD vs Lennar down 7.6%.

KBW upgraded Toll Brothers to outperform from market perform and downgraded Lennar to underperform, citing a “K-shaped” housing recovery favoring affluent buyers. Analyst Jade Rahmani said Lennar’s entry-level mix (~50%) faces pressure from high housing costs, weak consumer confidence, uncertain jobs, and high mortgage rates. KBW set price targets of $86 for Lennar (-5% vs Monday) and $161 for Toll (+17%).