Market Minute: Earnings Previews: Micron (MU), Lennar (LEN)

Edit: Micron and Lennar report Wednesday postmarket. 

There are two big names reporting earnings after the close tomorrow: Micron and Lennar. Let’s preview Street expectations and what to watch for. 

Micron (MU) will report 1Q25, which Zacks expects to post $1.75 EPS and $8.71 billion in revenue, an increase of 284% and 84% respectively – massive growth, though in-line with other semiconductor companies. The stock has an implied move of $12 and is up over 25% year-to-date. 

Finding its niche in the semiconductor market, Micron has launched High-Bandwidth Memory chips (HBMs) that up the efficiency of and reduce power needs for A.I. The reduced power is especially important as aging electrical infrastructure tries to keep up with the new demands for data centers. Micron’s HBM chips are being included in Nvidia’s (NVDA) much-touted Blackwell systems. 

However, Citigroup analyst Christopher Danely (Buy rating & $150 price target), thinks that Micron will be hit by “legacy DRAM weakness” due to lack of consumer demand, and expects it to report slightly below estimates. While he thinks DRAM will recover later in 2025, if Micron does report weaker than expectations, the stock could be punished. As with Nvidia, guidance will be key, especially with regard to demand forecasting and production ability. 

Lennar (LEN) will report 4Q24 after the bell, with Zacks estimating EPS of $4.18 (-19% year-over-year) and revenue of $10.16 billion (-7.4% year-over-year). The implied move is around $9. Lennar has had an up-and-down year – mostly down since Thanksgiving, giving up nearly all of its yearly gains and hovering around 2% higher year-to-date. While homebuilders have struggled with higher interest rates, competitors like Pulte Group (PHM) and Toll Brothers (TOL) shares have both performed better, with TOL up over 30% year-to-date. 

Many market participants expect the Fed to pause its rate-cutting cycle, at least briefly, after a 25-basis point cut this week, meaning Lennar can’t rely on a return to lower rates enticing buyers. However, America still contends with a housing shortage, pressuring the market regardless. These conflicting forces squeeze Lennar between them – investors should watch the average price Lennar sells homes for in the quarter, along with building demand and completed houses. 

Lennar is the second-biggest homebuilder in the U.S., and offers a range between affordable and luxury, so it has a lot to offer in the market, but could also be spread too thin. Often, market moves after earnings are driven by surprise – to the upside or downside – so with the Street expecting a soft quarter, if Lennar can beat, we might see some optimism return to shares. 

Tune into the Schwab Network for earnings breakdowns and more!