UBS assesses Stockland has benefited significantly from government policy aimed at strengthening the new residential sector as well is a structural shift from urban centres caused by the pandemic.
Nevertheless, the strength in residential markets means risks around macro prudential policy are heightened and the broker downgrades to Neutral from Buy. Target is steady at $4.50.
UBS also notes, with gearing of around 24% and momentum in residential generating strong cash flow, the balance sheet is sound.
Developments are likely to have capital partners and be long dated.
Sector: Real Estate.
Target price is $4.50.Current Price is $4.38. Difference: $0.12 – (brackets indicate current price is over target). If SGP meets the UBS target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
