Mirvac Group
MGR Details
This report is an updated version of the report published on 20 May 2022 at 3:55 PM GMT.
Q3FY22 Highlights: Mirvac Group (ASX: MGR) is engaged in real estate investment, development and investment management. Recently, the company released its operational performance wherein it achieved 100% sales in Googong, NSW and Olivine, VIC. MGR released the highest level of apartments since FY17, with the launch of The Langlee Waverley and Montage & Overture at NINE Willoughby.
Sales Highlights (Source: Analysis by Kalkine Group)
Key Risks: The rising market share of its peers in the industry could impact the operational health of the business. In addition, MGR is exposed to a more complex regulatory environment; any failure in the compliances could lead the business to fines, penalties, etc.
Outlook: The company anticipates EPS of a minimum of 15.0 cpss for FY22, reflecting a rose of at least 7.1%. In addition, the company anticipates residential lot settlements of over 2,500 in the near future.
Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: The stock of MGR is trading near its 52-week low level of $2.130, offering a decent opportunity for accumulation. The stock has been corrected by ~9.99% in the past month. The stock has been valued using a P/E multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers, considering COVID-19 uncertainties and low business margins, etc. For valuation, peers such as Dexus (ASX: DXS), Vicinity Centres (ASX: VCX), LendLease Group (ASX: LLC), and others have been considered. Considering the expected upside in valuation, decent sales, optimistic outlook, and current trading levels, we recommend a ‘Buy’ rating on the stock at the current market price of $2.160, 20 May 2022, 10:30 AM (GMT+10), Sydney, Eastern Australia.
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
MGR Daily Technical Chart, Data Source: REFINITIV
Super Retail Group Limited
SUL Details
Trading Update: Super Retail Group Limited (ASX: SUL) operates specialty retail stores in the automotive, tools, leisure, and sports categories. As per the recent trading update for the first 43 weeks of FY22, Supercheap Auto and BCF have delivered record Easter trading results on the back of benefits from strong consumer demand and high stock availability in key categories.
Insights of 1HFY22: The below picture provides an overview of the company’s financial performance in 1HFY22:
Financial Summary (Source: Analysis by Kalkine Group)
Key Risks: The company is exposed to risks arising from the loss of customers. In addition, the business could be impacted by instability in the demand & supply.
Outlook: Looking forward, SUL would continue to reinvest in the business, which includes digital, loyalty and network, to execute its strategic priorities and grow its four core brands.
Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: The stock of SUL is trading below its 52-week low-high average of $9.190 - $13.730, respectively. The stock has been corrected by ~13.33% in the past month. The stock has been valued using a P/E multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers, considering COVID-19 uncertainties and low liquidity position, etc. For valuation, peers such as JB Hi-Fi Ltd (ASX: JBH), Harvey Norman Holdings Ltd (ASX: HVN), and Premier Investments Ltd (ASX: PMV) have been considered. Considering the expected upside in valuation, decent performance by Supercheap Auto and BCF, optimistic outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $9.290 as on 20 May 2022, 10:30 AM (GMT+10), Sydney, Eastern Australia.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
SUL Daily Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV
Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.
Technical Indicators Defined: -
Support: A level where-in stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in stock prices tend to find resistance when they are rising, and a uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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