Mirvac rallies on target price upgrades from Macquarie, Citi
Make us a preferred source
Make us a preferred source on Google
The news: Mirvac rallied in morning trade on the ASX after Macquarie and Citi upgraded their target prices on the property developer.
The numbers: Mirvac shares were up 2.5% to $2.25 by 11:50am AEDT. Shares closed 0.7% lower on Tuesday, despite the company reaffirming its full-year guidance and reporting growth in residential sales during the September quarter.
Macquarie retained its 'outperform' rating on Mirvac and hiked its target price 19% from $2.07 to $2.46. Citi also lifted its target price from $2.10 to $2.25 and kept its 'neutral' rating on Mirvac.
The context: Macquarie analysts noted Mirvac's improved residential sales activity in the first quarter compared to the previous corresponding period. They saw "an encouraging uptick in activity" in Victoria, successful releases across its middle ring projects in Sydney, while Brisbane and Perth continue to trade well.
Both Macquarie and Citi analysts said that Mirvac's near-term sales are poised to benefit from a new temporary off-the-plan stamp duty concession in Victoria, effective from 21 October and lasting for 12 months.
Stamp duty will continue to be paid on the market value of the property, but with construction or refurbishment costs deducted, resulting in an estimated 25% reduction in duty.
The sources: Macquarie research, Citi research
