The outbreak of coronavirus has shifted the economic outlook and funding markets in a negative direction, UBS notes. The broker calculates Lendlease requires $150-200m in transaction earnings to reach FY20 consensus forecasts.
The broker suspects major transactions will be difficult to execute, as buyers hold off, and there is material downside risk to FY20 earnings.
While the engineering sale is secure, the services sale is likely to be challenging in the current environment. The broker reduces FY20 and FY21 estimates by -14% and -15% respectively. Neutral rating and $18 target maintained.
Sector: Real Estate.
Target price is $18.00.Current Price is $11.26. Difference: $6.74 – (brackets indicate current price is over target). If LLC meets the UBS target it will return approximately 37% (excluding dividends, fees and charges – negative figures indicate an expected loss).
