Lendlease Group: Risk Reward Update

Research evidence excerpt

Lendlease Group: Risk Reward Update

UpdateM

RiskRisk RewardReward– Lendlease- LendleaseGroup (LLC.AX)Group (LLC.AX)

Strategy makes sense, but execution will take time

PRICE TARGET A$3.25 EQUAL-WEIGHT THESIS

25/50/25 weighting to our bull/base/bear case values, consistent with other EW-rated stocks ▪LLC is in the early stages of a strategy

in our coverage. simplification, which includes divesting

offshore construction and development

Key assumptions: assets, reducing gearing to a 5-15% target

Base: c.9x P/E, reflecting 1SD below LT average, applied against our FY28/29e EPS estimates. range, and returning capital to shareholders.

Bull: c.12x P/E, broadly reflecting the company's LT average multiple, applied against ▪Overseas projects have traditionally taken

FY28/29e average EPS estimates. longer than expected, driven by approvals,

Bear: P/E 2SD below LT avg, at trough FY26 EPS guidance. leasing, and planning delays, which in turn

These reflect LLC's execution uncertainties have tied up capital while delivering limited

returns. A$4.36

the strategy carries materialConsensus Price Target Distribution A$2.85 A$6.30 ▪However, execution and delivery risks, given: i) asset MS PT

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates sales may take time to complete, ii)

development margins previously achieved in

Australia may be more challenging to

replicate, and iii) the need to quickly restock

RISK REWARD CHART the Australian pipeline to drive profits

beyond FY26.

AUD

Consensus Rating Distribution

6 A$5.32A$5.32(+111.11%)A$5.32(+111.11%)(+111.11%) 50% Overweight

33% Equal-weight

17% Underweight

4.5 MS Rating

Source: Refinitiv, Morgan Stanley Research

A$3.25A$3.25(+28.97%)A$3.25(+28.97%)(+28.97%)

A$2.52A$2.52A$2.52

Risk Reward Themes