Stockland (SGP) – In the house
September 2, 2024
Stockland Corporation Limited (SGP) owns, funds, develops and manages one of Australia’s largest portfolios of residential and land lease communities, retail town centres, and workplace and logistics assets.
Operating EPS from Stockland (SGP) in FY24 of $0.33 per security marginally exceeded consensus expectations, as the developer continues to revamp its business structure and tighten its focus on residential projects away from retirement and retail assets. Highlighting this, master-planned community (MPC) settlements in FY24 topped guidance.
Stockland is now aiming for 5,300–5,700 lots in FY25, at an operating margin in the low 20s and with a weighting to the second half of the year. Stockland has guided to operating EPS of $0.32–33 per security for FY25, although this does not include any contribution from 12 MPCs acquired from Lendlease (LLC).
This latest set of numbers from Stockland underscored the company’s pre-eminent role in residential development and its strong business foundations, and its entry into so-called urban place-making projects such as Waterloo in Sydney adds to the stock’s attraction.
Overall, this leads us to maintain our Accumulate recommendation on Stockland, while we raise our target price to $5.00 from $4.70 following a post-results review of the company’s prospects.
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