Credit Suisse upgrades Mirvac

CS has changed analysts on MGR, upgraded the recommendation to Outperform - and the price surges 2.5%

MGR - MIRVAC GROUP

Credit Suisse rates MGR as Outperform (1) - Credit Suisse switches analyst on Mirvac Group and considers, amid a proliferation of negative residential news flow, demand remains robust for a quality product.

Moreover, the broker suspects Mirvac is undervalued and suggests the stock is cheap on both absolute and relative value terms.

Credit Suisse expects earnings growth of 5.3% over FY16-20 as a base case but analysis of embedded prices suggests higher margins may well drive growth closer to 6.7%. Outperform and $2.06 target retained.
Target price is $2.06 Current Price is $1.95 Difference: $0.11 If MGR meets the Credit Suisse target it will return approximately 6% (excluding dividends, fees and charges). Current consensus price target is $2.05, suggesting upside of 5.0%(ex-dividends)

Forecast for FY16: Credit Suisse forecasts a full year FY16 dividend of 10.00 cents and EPS of 13.00 cents .At the last closing share price the estimated dividend yield is 5.13%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.00.