Berkshire Bought $193 Million More Lennar. Abel Doesn’t “Envision a Quick Recovery”
Berkshire keeps buying Lennar shares even as the stock sinks below what it paid, a short seller questions the company's reported deliveries, and Greg Abel himself admits he sees no quick recovery in housing. That raises a question worth answering.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Over two days last week, Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) bought about 2.4 million more Class A shares of Lennar (NYSE:LEN), paying between $78.37 and $81.90 in a roughly $193 million purchase.
By Monday’s close, Lennar had fallen to $74.44 after a 6.73% one-day drop. The stock now trades below the range Berkshire paid and below its $75.70 52-week low.
Berkshire has permanent capital, and it is adding to a stock that keeps falling. It is doing so deliberately, because its chief executive, Greg Abel, said in early September that he does not see a quick recovery in housing.
Wall Street is unconvinced too. The consensus target sits only modestly above the price. The ratings lean toward hold and sell, and a short seller has just questioned the quality of Lennar’s reported deliveries. That raises a fair question: why does a long-horizon buyer keep buying a stock analysts will not defend?
What Berkshire’s Form 4 Filing Shows
Berkshire also bought about 15,000 Class B shares. Afterward, Berkshire held 28,438,045 Class A shares and 568,028 Class B shares, a stake of more than 11%.
That size is why you can see these trades at all. An investor owning more than 10% of a company’s registered stock becomes an insider for reporting purposes and must file a Form 4 within two business days. Berkshire’s buying now reaches the market almost in real time, and recent reporting noted its pace of purchases has slowed.
A Bearish Initiation and a Short Report in One Week
The first setback came when Morgan Stanley (NYSE:MS) initiated coverage at Underweight with a $65 target, well below the current price. The second came from Hunterbrook, which is short both Lennar and Millrose Properties (NYSE:MRP). Hunterbrook says that Millrose, the land company Lennar spun off in 2025, bought more than 700 finished Lennar homes worth about $200 million, including at least 356 in the final week of the quarter.
Builders are judged on deliveries against guidance. A related party buying homes at quarter end raises the question of whether reported deliveries reflect real end buyers or an internal transfer.
These remain allegations from a firm that profits if both stocks fall, and Lennar has not responded as of this writing, so the conflict calls for independent confirmation even if the claims prove accurate.
A $79 Target Offers Almost No Cushion
The consensus target of $79 implies upside of just 6.86%. Lennar is down 26.45% this year while the S&P 500 gained 13.62%.
The ratings show one Strong Buy and one Buy against nine Holds, three Sells and five Strong Sells. That mix leans heavily toward Hold and Sell ratings.
Analysts point to recent results. Adjusted EPS of $1.23 missed the $1.30 consensus, home sales gross margin slipped to 15.8% from 17.5%, and full-year delivery guidance was cut to 80,000 to 81,000 homes.
They are modeling today’s rates, which CEO Stuart Miller put at approximately 7%. Berkshire is underwriting the next cycle instead, which likely explains why it keeps buying.
Berkshire Is Paying for Land, Scale and Survival
Abel added that housing is an industry Berkshire is “invested in for the long term.” Lennar owns roughly 2% of its homesites and controls the rest through third parties.
Miller said Lennar is “compromising margin in order to maintain volume,” using incentives of 12%. High rates hurt smaller builders most because they lack the scale to fund that spending.
Berkshire’s $6.8 billion acquisition of Taylor Morrison already made it the fourth-largest U.S. homebuilder. If rates stay high for years, this thesis works for permanent capital but fails for anyone needing a return inside a normal holding period.
What Long-Term Lennar Holders Need to Know Now
Lennar’s setup likely rewards only holders whose horizon spans a full housing cycle, while management, its largest outside shareholder, and most analysts all expect a slow recovery, and the short report remains unanswered. Miller said the land drag “will not finish quickly,” and fourth-quarter gross margin guidance of 15.5% to 16.0% shows no turn yet.
Berkshire itself offers another path to this exposure. Its shareholders get Lennar and Taylor Morrison exposure, buffered by insurance, rail, and utility earnings, without needing housing to recover on your schedule.
Contact [email protected] for any questions or corrections.
Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
