Macquarie remains cautious about the balance sheet as gearing is 39% and there is an interest cost headwind over FY22-FY24. Still, with the stock trading on 14x FFO and at a -21% discount to NTA value seems to be emerging.
The broker also observes retail is relatively more defensive as an asset class in cyclical downturns and as a result upgrades to Neutral from Underperform.
Retail sales continue to surprise to the upside, supported by strong employment and elevated savings. Target is reduced to $2.79 from $2.85.
Sector: Real Estate.
Target price is $2.79.Current Price is $2.72. Difference: $0.07 – (brackets indicate current price is over target). If SCG meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
