Stockland Corporation Limited (ASX: SGP)

Stockland Corporation Limited is an ASX index listed diversified property development entity that has business in shopping centres, industrial estates, housing estates, among others.

Investment Rationale – SELL at AUD 4.54

• Profit Booking: SGP’s stock price breached the R2 level suggested in the report published on 9 January 2023. Therefore, it is presenting a profit booking opportunity.
• Overvalued Multiples: On a forward 12-month basis, key trading multiples (Price/Earnings, Price/Book, and Price/Cash Flow) are higher than the median of the Financials sector.
• Technical Indicator: The momentum oscillator 14-day RSI (~73.24) is trading in the overbought zone; and thus, price can face correction in the short-term.
• Macroeconomic Risks: SGP’s stock price is susceptible to the uncertainties around the interest rate hike, inflationary pressure, global economic recession, and subdued consumer disposable income that can affect demand prospects.

Share Price Chart  

(Source: Refinitiv, Analysis done by Kalkine Group)

Valuation Methodology: Price/Earnings Approach (FY24E) (Illustrative)

Conclusion

Based on the notional gains, macroeconomic challenges, coupled with the unfavorable valuation conducted above, a "SELL" recommendation on Stockland Corporation Limited has been given at the current market price of AUD 4.54 (as of 1 May 2023, at 11:40 AM GMT+10).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 1 May 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/ or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the Australian Securities Exchange (ASX) and or REFINITIV. Typically, both sources (ASX and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

Disclaimer

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