Lennar completes the sale of its solar business SunStreet to Sunnova.

Lennar Corporation has recently completed the sale of its SunStreet Energy Group division to Sunnova Energy International Inc., one of the leading providers of solar energy and storage services in the United States.

As part of the agreement, Sunnova Energy has become the exclusive provider of solar energy and residential storage services for Lennar's new housing communities nationwide. Additionally, Lennar has committed to making tax equity investments to support Sunnova's builder customer portfolio. The partnership will also focus on the development and implementation of innovative energy technologies, such as home storage and community microgrids.

SunStreet has developed a strong understanding of home construction operations and has established a good reputation as a leader in the residential solar energy market over the years. This partnership will allow SunStreet's convenient and high-quality installation to reach more new home builders. Additionally, existing SunStreet customers will have the option to access new energy services by adding battery storage and other core offerings from Sunnova.

Stuart Miller, Chief Executive Officer of Lennar, commented: “This transaction, in exchange for shares of Sunnova, represents a long-term investment by Lennar in the company that we believe is better positioned to innovate and evolve in the dynamic and rapidly growing field of sustainable energy. We look forward to working with the exceptional team at Sunnova to develop industry-leading solar products for a better future.”

Impact on Stock Prices

Lennar's shares have increased by 28.3% in the last six months, outperforming the industry's 12% rally. Additionally, earnings estimates for 2021 have been revised upward over the past 30 days, reflecting analysts' optimism about the potential for profit growth. It is worth noting that the company has a strong track record of positive earnings surprises, having exceeded Zacks' consensus estimates in 12 of the last 14 quarters.

Sector Outlook and Positioning of Lennar

Lennar is engaged in the construction of homes and financial services in the United States. Despite having a diversified product portfolio, home construction remains Lennar's core business. The home construction operations (, which accounted for 93.3% of total revenues for the fiscal year 2020), include the sale and construction of single-family attached and detached homes, as well as the purchase, development, and sale of residential land both directly and through unconsolidated entities.

Ranking and Other Key Recommendations

Lennar currently has a Zacks Rank #1 (Strong Buy).

Other well-positioned companies in the Housing Construction industry - Zacks Home Builders include:

• KB Home (KBH): Zacks Rank #1
• D.R. Horton, Inc. (DHI): Zacks Rank #2 (Buy)
• PulteGroup, Inc. (PHM): Zacks Rank #2 (Buy)

KB Home and D.R. Horton's earnings for fiscal year 2021 are expected to increase by 74.8% and 42.9%, respectively. Meanwhile, PulteGroup's earnings for 2021 are projected to grow by 18.7%.