This article is from the Australian Property Journal archive
BARGAIN hunting investors lapped up Mirvac yesterday, enabling the property group to gain back losses posted earlier this week.
Investors rushed back to Mirvac after analysts said the group’s shares were a bargain.
JPMorgan said whilst it has reduced its June 2009 target price to $3.16 from $3.64, it viewed Mirvac as cheap.
GoldmanSachs JBWere also downgrade its target price from $3.30 to $2.76.
Credit Suisse noted that Mirvac is now down 61.5% on a year to date, 23.9% more than the A-REIT sector.
And Credit Suisse made the unusual move of upgrading Mirvac from Underperform to Outperform.
Credit Suisse said the upgrade was based on cheapness of the stock compared to the A-REIT large cap sector; Mirvac has a sustainable business model without significant reliance on external capital; and there is earnings upside via residential completions in FY10 and beyond.
But Credit Suisse did reduce its 12-month price target from $3.40 to $2.97.
Finally Citi Investment Research placed a Medium Risk rating on Mirvac and cited a specific risk in Mirvac’s significant development exposure to the residential property market, which in turn is impacted by interest rate changes, housing affordability and new construction.
Citi Investment Research was also concerned about Mirvac’s high weighting to office property – returns of which are subject to changes in the level of business confidence, employment growth and competitive supply.
“A favourable or adverse movement in risk due to changes in these factors may result in the share price not meeting our target price,”
Citi Investment Research, downgraded its target price from $2.50 to $2.45.
Yesterday over 26 million volume of Mirvac securities worth $67.28 million were traded yesterday.
Mirvac shares opened at $2.31 and never looked back jumping to as high as $2.63 before closing 19 cents higher at $2.50 – after falling 14 cents a day earlier.
As a result, Mirvac’s market cap rose by $209.18 million to $2.75 billion.
Australian Property Journal
