Jul. 23 at 8:09 PM
S&P Global Ratings revised Lennar’s outlook to stable from positive and affirmed its BBB issuer rating, citing lower revenue and margin compression amid housing affordability challenges and high mortgage rates. Lennar’s homebuilding revenue fell 8% to
$13.9 billion in the six months ended May 31, 2026, while gross margins declined to 15.4% from 18.2%, driven by lower average selling prices and weak consumer demand.
S&P expects continued margin pressure, with EBITDA margins of 7%-8% in 2026 before improving toward 9% in 2027-2028. Despite weaker credit metrics, Lennar’s leverage remains manageable, with debt-to-EBITDA at 1.7x, supported by a disciplined financial policy and
$4.7 billion in liquidity. The stable outlook reflects expectations that leverage will remain below 2x over the next two years, though a sustained rise above that level or further margin deterioration could trigger a downgrade.
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