Morningstar

Lendlease Group LLC

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Stock XASX Rating as of
A$7.27 +0.12 (1.68%)
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As of Delayed Price Post-Trading: A$7.27 0.00

Company Report

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Horrible Year for Lendlease, but Planned Simplification Gives Reasons for Optimism

Mathew Hodge

Lendlease kicked off a major shift in strategy in 2024, with plans to exit its international development and construction businesses, and focus on Australia. The group is a diversified property developer, landlord, property manager, fund manager, and builder on a range of development projects, funds, and completed properties around the world. However, within a few years, its offshore interests will mainly be limited to owning and managing mature investment assets, not development or construction projects. This will involve completing work-in-progress, selling its Asian, European, and United States development projects that haven't already started, selling its offshore construction capabilities, and its retirement and US military housing businesses, and Australian communities development.

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Price vs Fair Value

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LLC is trading at a 687% premium.
Price
A$7.15
Fair Value
A$3.60
Uncertainty
High
1-Star Price
A$37.22
5-Star Price
A$5.90
Economic Moat
Wkkw
Capital Allocation
Bfmfsmyw

Bulls Say, Bears Say

Bulls

The balance sheet should improve as Lendlease sells overseas assets and completes work-in-progress developments.

Bears

Lendlease’s construction division generates huge revenue, but slim margins. Unexpected cost blowouts can destroy capital.

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Trading Information

Previous Close Price
A$7.15
Day Range
A$7.16–7.27
52-Week Range
A$5.32–7.73
Bid/Ask
A$7.26 / A$7.28
Market Cap
A$5.02 Bil
Volume/Avg
1.3 Mil / 1.7 Mil

Key Statistics

Price/Earnings (Normalized)
22.08
Price/Sales
0.53
Dividend Yield (Trailing)
2.24%
Dividend Yield (Forward)
2.24%
Total Yield
2.24%

Company Profile

Lendlease’s business comprises three segments: development, investments, and construction, and going forward, the main focus will be Australia. The group sells stakes in mature projects to its funds management clients. This sacrifices development profit, in return for management fees, reduced risk, and capital to accelerate new projects in the pipeline. Construction generates large revenues but slim margins. This business is largely retained to preserve expertise and scale for the development business. Lendlease sold its engineering and services business during the pandemic, but retains some risks, notably the Melbourne Metro project. It is also exiting its retirement living and Australian communities businesses.
Sector
Real Estate
Industry
Real Estate - Diversified
Stock Style Box
Mid Value
Total Number of Employees
12,000
Website
https://www.lendlease.com

Competitors

Valuation

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Metric
LLC
SGP
CHC
Price/Earnings (Normalized)
 22.0822.1813.63
Price/Book Value
 1.021.262.61
Price/Sales
 0.534.2114.83
Price/Cash Flow
 —110.3917.52
Price/Earnings
LLC
SGP
CHC

Financial Strength

Metric
LLC
SGP
CHC
Quick Ratio
 0.520.671.79
Current Ratio
 1.071.702.10
Interest Coverage
 −4.631.42−3.23
Quick Ratio
LLC
SGP
CHC

Profitability

Metric
LLC
SGP
CHC
Return on Assets (Normalized)
 −2.22%2.12%−4.62%
Return on Equity (Normalized)
 −6.66%3.61%−5.85%
Return on Invested Capital (Normalized)
 −4.19%1.63%−4.67%
Return on Assets
LLC
SGP
CHC

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