The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Lennar (NYSE:LEN) and the rest of the industrials stocks fared in Q2.
Traditionally, industrials companies--while diverse in nature--have built competitive advantages via some combination of economies of scale, brand recognition, and strong relationships with customers such as manufacturers or contractors. In recent decades, secular trends like energy efficiency and automation are driving innovation, leading to incremental demand. However, these companies are still at the whim of macroeconomic health, which tends to be cyclical and can be impacted heavily by factors such as interest rates. Shocks like geopolitical conflicts can also impact this increasingly global industry.
The 11 industrials stocks we track reported a slower Q2; on average, revenues missed analyst consensus estimates by 1.9%. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and industrials stocks have held roughly steady amidst all this, with share prices up 3% on average since the previous earnings results.
Lennar (NYSE:LEN) One of the largest homebuilders in America, Lennar (NYSE:LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.
Lennar reported revenues of $8.77 billion, up 9% year on year, exceeding analysts' expectations by 2.5%. Overall, it was an ok quarter for the company with a decent beat of analysts' earnings estimates but a miss of analysts' backlog sales estimates.
Stuart Miller, Executive Chairman and Co-Chief Executive Officer of Lennar, said, "We are pleased to report another strong quarter against the backdrop of evolving market conditions as interest rates rose for most of the quarter and then subsided as the quarter closed. Although affordability continued to be tested by interest rate movements and simultaneously challenged consumer sentiment, purchasers remained responsive to increased sales incentives, resulting in a 19% increase in our new orders and a 15% increase in our deliveries year over year. The macroeconomic environment remained relatively consistent with employment remaining strong, housing supply remaining chronically short due to production deficits over a decade, and demand strength driven by strong household formation. We remained focused on consistent production pace driving sales pace, while using pricing, incentives, marketing spend and margin adjustment to enable consistent sales volume in a fluctuating interest rate environment."
Lennar scored the fastest revenue growth of the whole group. The stock is up 2.2% since reporting and currently trades at $160.
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Best Q2: Apogee (NASDAQ:APOG) Involved in the design of the Apple (NASDAQ:AAPL) Store on Fifth Avenue in New York City, Apogee (NASDAQ:APOG) sells architectural products and services such as high-performance glass for commercial buildings.
Apogee reported revenues of $331.5 million, down 8.3% year on year, in line with analysts' expectations. It was a very strong quarter for the company with an impressive beat of analysts' earnings estimates.
The market seems content with the results as the stock is up 3.8% since reporting. It currently trades at $61.37.
Weakest Q2: Worthington (NYSE:WOR) Founded by a steel salesman, Worthington Enterprises (NYSE:WOR) specializes in steel processing, pressure cylinders, and engineered cabs for commercial markets.
Worthington reported revenues of $318.8 million, down 13.6% year on year, falling short of analysts' expectations by 9.6%. It was a weak quarter for the company with a miss of analysts' earnings estimates and a miss of analysts' Building Products revenue estimates.
As expected, the stock is down 4.5% since the results and currently trades at $47.85.
FedEx (NYSE:NYSE:FDX) Founded by a former Marine pilot, FedEx (NYSE:FDX) provides transportation, e-commerce, and business services to companies and individuals.
FedEx reported revenues of $22.11 billion, flat year on year, in line with analysts' expectations. Overall, it was an ok quarter for the company with a narrow beat of analysts' earnings estimates.
The stock is up 16.9% since reporting and currently trades at $299.69.
Fastenal (NASDAQ:FAST) Founded in 1967, Fastenal (NASDAQ:FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.
Fastenal reported revenues of $1.92 billion, up 1.8% year on year, in line with analysts' expectations. Revenue aside, it was an ok quarter for the company with a narrow beat of analysts' earnings estimates.
The stock is up 1.9% since reporting and currently trades at $65.42.
This content was originally published on Stock Story
