** Homebuilder Lennar's shares LEN.N fall 1.4% to $89.44 premarket

** KBW lowers rating to "underperform" from "market perform" to reflect "high entry-level exposure in a challenging demand and rate backdrop"

** Brokerage also cites ongoing margin headwind of 8.5% annual option payment on $6.4 bln of land held by Millrose Properties

** "We expect LEN's margin recovery to lag peers," says KBW

** Cuts price target to $86 from $97, representing a 5.2% downside to the stock's last close

** One of 20 brokerages rates the stock "strongbuy", 10 "hold" and 9 "sell" or lower; their median PT is $88.50 - LSEG-compiled data

** As of last close, stock had fallen 11.7% YTD