Selected stock price target news of the day - June 15, 2023

By Matthew Otto

Lennar Beats Q2 Estimates and Wall Street Expectations Amid Housing Market Recovery

Lennar announced strong financial results for its second quarter ended May 31, 2023. The company posted net earnings per diluted share of $3.01 and total revenue of $8 billion. These figures surpassed Wall Street’s expectations, which had predicted earnings per share of $2.33 and revenue of $7.2 billion, according to FactSet.

In addition to exceeding earnings estimates, Lennar also surpassed expectations for orders and deliveries during the typically strong spring season. The company reported 17,885 new orders and delivered 17,074 homes in the second quarter.

Furthermore, the company also provided optimistic guidance for the upcoming third quarter, projecting home deliveries to range from 17,750 to 18,250, which was above analysts’ expectations.

The results captured an unusual spring selling season marked by the fallout of the Federal Reserve’s aggressive interest rate hikes in 2022. Despite these adjustments, prospective buyers seemed to have accepted a “new normal” of higher rates and demand has accelerated.

With the housing market recovering, the company’s average sales price per home delivered declined to $449,000, but its deliveries and new orders were both up compared with the year prior. This was largely due to the company’s strategic pricing adjustments and incentives offerings.

Wedbush adjusts price targets higher

Wedbush analyst Jay McCanless keeps a Neutral but raises the price target from $94 to $123.

McCanless got burned during the stock fall in 2022 from $112 to $68 after which he turned more conservative and as a result missed the recovery after.

Analyst Nishu Sood (DEUTSCHE BANK) has currently the highest performing score on LEN with 13/14 (92.86%) price target fulfillment ratio. “On average, his price targets offer a potential upside of $4.33 (11.13%) and typically reach fulfillment within 181 days.

Citigroup Prepares to Absorb Severance Costs from 1,600 Job Cuts in Q2

Citigroup has announced that it will incur severance costs related to approximately 1,600 job cuts in the second quarter of 2023, according to Chief Financial Officer Mark Mason. Speaking at a conference in New York on Wednesday, Mason indicated that the bank’s expenses for Q2 will be between $300 million and $400 million higher than those of Q1 due to these restructuring and repositioning charges.

Since the start of 2023, Citigroup has faced costs from a company-wide reduction of 5,000 positions, predominantly affecting the banking, markets, and functions departments. While not all of these individuals have left the firm, the majority have been informed of the impending changes.

Several of the cuts are coming from units that Citigroup has decided to divest, however, the exact number was not disclosed. To date, Citigroup has withdrawn from seven of the 14 markets from which it plans to divest. Following unsuccessful attempts to sell its Mexican unit, the bank has now opted to spin off this division in 2024, with plans to list it in 2025.

Mason also cautioned investors about a potential decline in investment banking and trading revenues. Market revenues have fallen by 20% so far this quarter compared to the same period in 2022. In investment banking, revenues are projected to be down 25% year over year. Mason admitted, “It’s been tough to call exactly when the wallet will rebound,” but noted there have been “green shoots” in debt capital markets activity.

Morgan Stanley remains pessimistic

Morgan Stanley analyst Betsy Graseck keeps an Underweight rating and a $45 price target. The analyst turned bearish on her fellow bank in April last year which proved to be a correct move.

Graseck has currently the highest performing score on C with 4/7 (57.14%) price target fulfillment ratio. On average, her price targets offer a potential upside of $3.5 (5.90%) and typically reach fulfillment within 13 days.

T-Mobile Partners with Google Cloud to Leverage 5G

T-Mobile is set to connect its 5G Advanced Network Solutions (ANS) suite, which includes public, private, and hybrid 5G networks, with Google Distributed Cloud Edge (GDC Edge). This combination will support the creation of next-generation 5G applications and use cases, including augmented reality and virtual reality experiences.

As digital transformation becomes a priority, more companies are turning to edge computing. The global edge computer market size is projected to increase by 37.9% to reach $155.9 billion by 2030. Combining edge computing with 5G’s low latency, high speeds, and reliability could unlock significant use cases in various sectors, such as retail, manufacturing, logistics, and smart cities.

T-Mobile and Google Cloud’s partnership is targeting enterprises and government organizations. The main focus will be enhanced capability offering of control and monitoring using IoT (Internet of Things).

To showcase the potential of 5G ANS and GDC Edge in retail, T-Mobile has developed a proof of concept at its Tech Experience 5G Hub – the “magic mirror” – supported by Google Cloud. This interactive display uses cloud-based processing and image rendering at the edge to bring retail products to life interactively.

Morgan Stanley slightly adjusts higher

Morgan Stanley analyst Simon Flannery maintains an Overweight rating and lifts the price target from $177 to $178.

Analyst Brandon Nispel (KEYBANK) has currently the highest performing score on TMUS with 9/16 (56.25%) price target fulfillment ratio. On average, his price targets present a potential upside of $16.22 (16.31%) and usually achieve fulfillment within 149 days