Lendlease Group has seen its share price fall sharply in recent years, which puts the spotlight squarely on whether the current valuation is still supported by the revenue the business generates. With the stock back near multi-year lows, the key issue for you as an investor is how that share price lines up against the sales base of the group today.
-
Over the past 5 years, Lendlease Group has declined 74.4%, which makes the link between its current share price and its underlying sales a central question for anyone considering the stock.
-
The group relies on turning large, long dated property and infrastructure projects into cash, so any shift in execution speed, development margins or capital recycling can change how much investors are willing to pay for each dollar of revenue.
-
The analysts covering Lendlease Group have run their own numbers. See what analysts think Lendlease Group's shares could be worth .
The issue now is whether Lendlease Group's current share price is adequately supported by its sales when set against the Fair Ratio benchmark.
If you are weighing whether Lendlease Group's A$2.39 share price lines up with its sales, it can help to compare against a broader set of 4 high quality undervalued stocks .
Does Lendlease Group Look Undervalued on Sales?
Price to sales is a useful lens for Lendlease Group because the group runs large development projects where revenue often tells you more than near term earnings. On that measure, the stock trades on a P/S of about 0.3x, compared with a Real Estate industry average of roughly 2.7x and a peer group closer to 3.3x. That is a steep gap for a business that still reports a sizeable top line.
The Fair Ratio, which blends in factors like growth profile, profitability, size and risk, sits above where Lendlease Group currently trades on sales. On this framework, the present 0.3x multiple screens as undervalued. For you as a shareholder or potential buyer, the key question is whether the quality and resilience of those revenues justify closing some of that gap, or whether balance sheet pressure, project risk or execution hurdles mean the discount should persist. Explore the numbers behind Lendlease Group's P/S valuation .
The Lendlease Group Narrative: What Would Justify Today's Price?
Narratives on Simply Wall St's Community page pick up where the valuation puzzle leaves off for Lendlease Group, spelling out what would need to happen to growth, margins and earnings for the shares to be worth materially more or less than today. Rather than relying on a single multiple or model, each narrative lays out the assumptions behind its view of fair value so you can track those against future results as they emerge.
One of the top community narratives on Lendlease Group: roughly fairly valued
"Lendlease looks cheap relative to its reported asset value, but at $2.80 I don't think the discount is yet wide enough..."
Discover why this Narrative puts Lendlease Group at roughly fairly valued .
Lendlease Group's valuation leaves a forward looking question unanswered
Current pricing tells only part of the story. The next piece is what professional analysts think Lendlease Group could look like a few years from now, and how that assessment compares with today's multiples. Explore where analysts expect Lendlease Group to be in a few years .
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LLC.AX .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
