First half results were in line although Credit Suisse notes a strong skew to the second half will be required to hit guidance. Lower residential and land lease settlement volumes are expected over FY22 but should be offset by higher margins.
The broker notes price increases appear to be offsetting cost pressures, with Stockland Group maintaining its operating profit margin of more than 18%.
Credit Suisse also believes the sale of the retirement business is a positive as it is been a drag on returns for many years. Rating is upgraded to Outperform from Neutral and the target reduced to $4.56 from $4.66..
Sector: Real Estate.
Target price is $4.56.Current Price is $4.18. Difference: $0.38 – (brackets indicate current price is over target). If SGP meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
