Lendlease Group

Market Cap

AU$10.7b

Last Updated

2019/12/09 10:31 UTC

Data Sources

Company Financials +

Executive Summary

Lendlease Group provides property and infrastructure solutions in Australia, Asia, Europe, and the Americas.

Rewards

Earnings are forecast to grow 14.01% per year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Profit margins (2.8%) are lower than last year (4.8%)

Snowflake Analysis

Limited growth with imperfect balance sheet.

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Share Price & News

How has Lendlease Group's share price performed over time and what events caused price changes?

Latest Share Price and Events

Stable Share Price: LLC has not had significant price volatility in the past 3 months.

Market Performance

7 Day Return

-2.8%

LLC

-1.1%

AU Real Estate

-2.0%

AU Market

1 Year Return

60.8%

LLC

42.3%

AU Real Estate

16.7%

AU Market

Return vs Industry: LLC exceeded the Australian Real Estate industry which returned 42.3% over the past year.

Return vs Market: LLC exceeded the Australian Market which returned 16.7% over the past year.

Shareholder returns

	LLC	Industry	Market
7 Day	-2.8%	-1.1%	-2.0%
30 Day	-2.8%	-0.4%	-0.7%
90 Day	10.0%	10.0%	0.2%
1 Year	65.2%60.8%	47.3%42.3%	22.5%16.7%
3 Year	51.2%36.0%	34.5%20.1%	35.4%16.8%
5 Year	42.9%18.9%	47.3%21.2%	60.6%24.4%
Include Dividend Returns

Price Volatility Vs. Market

How volatile is Lendlease Group's share price compared to the market and industry in the last 5 years?

Simply Wall St News

6 days ago | Simply Wall St

How Did Lendlease Group's (ASX:LLC) 7.3% ROE Fare Against The Industry?

3 weeks ago | Simply Wall St

Is Lendlease Group (ASX:LLC) An Attractive Dividend Stock?

1 month ago | Simply Wall St

Should You Be Tempted To Sell Lendlease Group (ASX:LLC) Because Of Its P/E Ratio?

Valuation

Is Lendlease Group undervalued compared to its fair value and its price relative to the market?

22.58x

Price to Earnings (PE) ratio

Share Price vs. Fair Value

Below Fair Value: LLC (A$18.73) is trading above our estimate of fair value (A$12.46)

Significantly Below Fair Value: LLC is trading above our estimate of fair value.

Price To Earnings Ratio

PE vs Industry: LLC is poor value based on its PE Ratio (22.6x) compared to the Real Estate industry average (13.1x).

PE vs Market: LLC is poor value based on its PE Ratio (22.6x) compared to the Australian market (18.6x).

Price to Earnings Growth Ratio

PEG Ratio: LLC is poor value based on its PEG Ratio (1.6x)

Price to Book Ratio

PB vs Industry: LLC is overvalued based on its PB Ratio (1.7x) compared to the AU Real Estate industry average (0.9x).

Next Steps

Explore potentially undervalued companies in the Real Estate industry.

Future Growth

How is Lendlease Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

14.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LLC's forecast earnings growth (14% per year) is above the savings rate (1.1%).

Earnings vs Market: LLC's earnings (14% per year) are forecast to grow faster than the Australian market (9.4% per year).

High Growth Earnings: LLC's earnings are forecast to grow, but not significantly.

Revenue vs Market: LLC's revenue is expected to decline over the next 3 years (-2.8% per year).

High Growth Revenue: LLC's revenue is forecast to decline over the next 3 years (-2.8% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LLC's Return on Equity is forecast to be low in 3 years time (12.7%).

Next Steps

Explore growth companies in the Real Estate industry.

Past Performance

How has Lendlease Group performed over the past 5 years?

-7.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LLC has a large one-off gain of A$274.0M impacting its June 30 2019 financial results.

Growing Profit Margin: LLC's current net profit margins (2.8%) are lower than last year (4.8%).

Past Earnings Growth Analysis

Earnings Trend: LLC's earnings have declined by -7.4% per year over the past 5 years.

Accelerating Growth: LLC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LLC had negative earnings growth (-41.1%) over the past year, making it difficult to compare to the Real Estate industry average (-2.4%).

Return on Equity

High ROE: LLC's Return on Equity (7.3%) is considered low.

Return on Assets

Return on Capital Employed

Next Steps

Explore strong past performing companies in the Real Estate industry.

Financial Health

How is Lendlease Group's financial position?

Financial Position Analysis

Short Term Liabilities: LLC's short term assets (A$5.8B) do not cover its short term liabilities (A$6.3B).

Long Term Liabilities: LLC's short term assets (A$5.8B) exceed its long term liabilities (A$4.5B).

Debt to Equity History and Analysis

Debt Level: LLC's debt to equity ratio (42.7%) is considered high.

Reducing Debt: LLC's debt to equity ratio has reduced from 48.2% to 42.7% over the past 5 years.

Debt Coverage: LLC's debt is not well covered by operating cash flow (2.2%).

Interest Coverage: LLC's interest payments on its debt are not well covered by EBIT (1.2x coverage).

Balance Sheet

Inventory Level: LLC has a low level of unsold assets or inventory.

Debt Coverage by Assets: LLC's debt is covered by short term assets (assets are 2.1x debt).

Next Steps

Explore more healthy companies in the Real Estate industry.

Dividend

What is Lendlease Group's current dividend yield, its reliability and sustainability?

2.24%

Current Dividend Yield

Dividend Yield vs Market

Current dividend yield vs market & industry

Notable Dividend: LLC's dividend (2.24%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: LLC's dividend (2.24%) is low compared to the top 25% of dividend payers in the Australian market (5.59%).

Stability and Growth of Payments

Stable Dividend: LLC's dividend payments have been volatile in the past 10 years.

Growing Dividend: LLC's dividend payments have fallen over the past 10 years.

Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (50.6%), LLC's dividend payments are covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: LLC's dividends in 3 years are forecast to be well covered by earnings (49.9% payout ratio).

Next Steps

Explore strong dividend paying companies in the Real Estate industry.

Management

What is the CEO of Lendlease Group's salary, the management and board of directors tenure and is there insider trading?

3.6yrs

Average management tenure

CEO

Steve McCann (54yo)

11yrs

Tenure

AU$5,463,000

Compensation

Mr. Stephen B. McCann, also known as Steve, has been Group Chief Executive Officer of LendLease Group (alternate name: Lend Lease Corporation Limited) since December 16, 2008 and has been its Group Managin ...

CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD3.74M) is about average for companies of similar size in the Australian market ($USD3.02M).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.

Management Age and Tenure

3.6yrs

Average Tenure

54yo

Average Age

Experienced Management: LLC's management team is considered experienced (3.6 years average tenure).

Board Age and Tenure

5.0yrs

Average Tenure

64.5yo

Average Age

Experienced Board: LLC's board of directors are considered experienced (5 years average tenure).