Earnings results saw a stock price surge for ASX 200 REIT stock Mirvac Group (ASX: MGR) yesterday.
Following results, broker Macquarie has also tipped upside for the company.
Mirvac Group (ASX: MGR) is a diversified property group with interests across residential and master-planned communities, office and industrial, retail, and build-to-rent sectors.
Last week's FY25 results included:
- Operating profit after tax of $474 million
- Statutory profit of $68 million
- Operating earnings per stapled security of 12.0 cents
- Distribution of 9.0 cents per stapled security, totalling $355 million
- Net tangible assets (NTA) of $2.26 per security (FY24: $2.36)
- Headline gearing of 27.6% and $1.2 billion available liquidity
Stock price rises
Investors looked positively on these results, with Mirvac shares jumping almost 3.5% on Monday.
The operating profit of $474 million and a distribution totalling $355 million were both in line with guidance.
Investors may also have been optimistic about the completion of three new build-to-rent assets in Melbourne and Brisbane during FY25 and increased residential sales activity.
Macquarie's take
Broker Macquarie released a report on Mirvac Group last Friday.
It included an "outperform" rating and updated (increased) price target of $2.48. The positive outlook was on the back of a projection its total return should turn positive in 1H26 for the first time in 3 years.
Macquarie said Mirvac is past the trough in total returns (2H24) and is now entering a multi-year growth cycle, supported by:
- Residential recovery
- Stabilised office performance
- Major development completions
- Strong capital management and partnering strategies
- Improving interest rate environment
Guidance assumes improved residential performance with 2,000–2,300 residential settlements (MRE: ~2,250), including a greater contribution from builtform in master planned communities and an improved residential gross margin of ~20% (within the range of 18-22%).
Updated price target
Mirvac Group shares closed at $2.37 each on Monday.
Based on Macquarie Group's upgraded price target of $2.48, these ASX 200 shares could rise another 4.6%.
In the report, Macquarie said strong improvement in residential sales driven by offshore and investor interest returning, along with improving sentiment could be a catalyst for upside.
Simultaneously, the broker said continually soft margins at key apartment projects could drive downside risk to its earnings expectations.
Online brokerage platform Bell Potter values the ASX 200 company as close to fair value.
TradingView has a one year price target of $2.40.
