In a review of the Real Estate business of MAAS Group Holdings prior to the company’s upcoming investor day, Morgans sees potential earnings and valuation upside over time.
The analyst sees scope for settlement of around 500 residential lots in FY24, which would represent circa 18% upside to the broker’s existing forecast of 425 lots. Moreover, underlying returns on land sales may be stronger than anticipated.
As a result, the overall earnings (EBITDA) forecast for FY24 may be 30-54% above Morgans existing forecast. Despite the potential for an upside earnings surprise, the broker retains its $5.65 target price. The Add rating is unchanged.
Target price is $5.65.Current Price is $4.25. Difference: $1.40 – (brackets indicate current price is over target). If MGH meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).