Will Lennar Stock Extend Its Grim Post-Earnings Streak?

One of the final names on the earnings docket this season is homebuilding giant Lennar Corp (NYSE:LEN), last seen down 3.1% to trade at $93.55, earlier tapping a three-year low of $93.22. Slated to share its fiscal first-quarter report after the close today, analysts expect earnings to come in at 95 cents per share on revenue of $6.82 billion.

Following each of its last eight reports, Lennar stock has finished lower, dropping 4% or more each time. The options market is pricing in 6.8% move for Friday's trading, much larger than the average 5% drop over the last two years.

Lennar stock has carved a channel of lower lows since a Sept. 5 12-month high of $144.23. Now off 20% year-over-year, LEN is headed for a ninth-straight drop and a fourth-straight weekly loss. Amidst this slide, the shares' 14-Day Relative Strength Index (RSI) sits deep in "oversold" territory at 22.

Options traders still lean bullish, per LEN's 50-day call/put volume ratio of 2.85 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the 92nd annual percentile, so an unwinding of this optimism could add more pressure to the security.

Traders are gearing up for the report, with 8,769 calls and 2,698 puts across the tape so far, quadruple the average intraday rate. The most popular contracts look to be a spread between the April 110 and 120 calls.