Stockland Corporation Ltd (ASX:SGP) has been downgraded to a sell from hold by UBS, due to tighter lending standards leading to house price falls, peak in activity, higher than expected debt levels, and a downwards revisions of earnings in FY20 and FY21 of 3%/8%.
Stockland has successfully launched some long dated projects in Melbourne and Sydney as well as new projects to be started in Melbourne and Brisbane, which will limit downside to earnings as well as ongoing population growth. The price target is $4.08, while the current share price is $4.23.
Other AREITS involved in the residential housing sector include Mirvac Group (ASX:MGR), which also has exposure to the office, industrial and retail sectors, and Lendlease Group (ASX:LLC), also involved infrastructure with operations in Australia, Asia, Europe and America.
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Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.