Post FY22 results, Morgan Stanley takes a deeper look at Mirvac Group's residential sales momentum, as it drives market sentiment towards the developers. This is because momentum is considered a strong forward indicator of residential settlements and earnings.

Mirvac Group's pre-sales showed a slowdown in the 2H of FY22, with land lot sales falling by -42% compared to the 1H.

The brokers concerns relate to earnings visibility of active profits in FY23 (no developments locked in) and an Equal-weight rating is maintained. One potential upside would be if the group secured a partner for its office/industrial pipeline.

The target price of $2.30 is retained. Industry view: In-Line.

Sector: Real Estate.

Target price is $2.30.Current Price is $2.07. Difference: $0.23 - (brackets indicate current price is over target). If MGR meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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