This week, UBS upgraded LLC from sell to neutral while they slapped a sell call on the market favourite Goodman Group (GMG). May’s strategy update aligned with investor expectations, with a commitment to exit offshore Development and Construction while maintaining a global Investment footprint. Also, a further $1.7bn of asset sales, including offshore construction, should allow further capital returns/buybacks and redeployment of capital into new projects in Australia to replenish their pipeline. Once the business clean-up is complete, the stocks arguably trading around fair value between $5.50 and $6, but that is not a good reason to call a bottom in the share price, i.e. we would rather pay a higher price for the stock once management starts to deliver.
- We believe it’s too early to call for a turnaround in the fortunes of a LLC, but it’s starting to offer value for the brave.
MM is neutral towards LLC
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