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LendLease Group (LLESY)
OTHER OTC:LLESY
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LendLease Group
(OTC:LLESY)
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Rating:50Neutral
Price Target:
$3.00
▼(-11.24% Downside)
Action:ReiteratedDate:02/24/26
The score is held back primarily by weak financial performance (declining revenue, thin/negative operating profitability, and negative operating/free cash flow) and bearish technicals (below major moving averages with negative MACD). Offsetting factors include a more reasonable valuation with a solid dividend yield and an earnings call that maintained guidance and outlined liquidity/cost actions, though successful deleveraging remains dependent on transaction execution.
Positive Factors
Construction backlog & revenue growth
A materially larger secured and preferred construction pipeline provides multiyear revenue visibility and operational scale. This durable backlog supports predictable cash conversion from construction contracts, underpins margins as projects roll through, and diversifies earnings away from cyclical development timing.
Investment management scale & recurring fees
A large, stable FUM base and meaningful co-invest capital generate fee income and incentive potential that is less cyclical than development profits. High management EBITDA margins imply scalable, recurring cash generation that can stabilize earnings through real estate cycles and support capital-light growth.
Liquidity, deleveraging plan & leadership continuity
Substantial available liquidity plus a clear capital recycling plan and internal CFO succession reduce execution risk. The funding buffer and management continuity support orderly deleveraging, completion of strategic transactions, and execution of cost savings—strengthening resilience over the medium term.
Negative Factors
Weak cash generation
Persistently negative operating and free cash flows constrain the company’s ability to self-fund developments, repay debt, or reinvest without asset sales or external financing. Over months, this elevates reliance on capital recycling and liquidity facilities, limiting strategic flexibility and increasing refinancing risk.
High gearing and transaction dependency
Underlying gearing is materially above target and explicitly depends on executing ~$3bn of asset sales. This creates execution and timing risk: failed or delayed transactions can leave leverage elevated, constrain buybacks/dividends, and force distress sales or adverse refinancing, impacting long-term capital structure.
Impairments, statutory and operating losses
Large statutory and operating losses driven by impairments and CRU write-downs erode capital, reduce reported earnings quality, and signal valuation pressure in select markets. Such noncash and cash-impacting losses can persistently compress return metrics and complicate stakeholder confidence and dividend sustainability.
LendLease Group (LLESY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.96B
Dividend Yield4.16%
Average Volume (3M)0.00
Price to Earnings (P/E)―
Beta (1Y)0.68
Revenue Growth-17.89%
EPS GrowthN/A
CountryUS
Employees12,000
SectorReal Estate
Sector Strength53
IndustryReal Estate - Diversified
Share Statistics
EPS (TTM)-0.33
Shares Outstanding690,647,900
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio-0.14
Price to Book (P/B)0.73
Price to Sales (P/S)0.49
P/FCF Ratio-4.74
Enterprise Value/Market Cap3.30
Enterprise Value/Revenue1.10
Enterprise Value/Gross Profit23.43
Enterprise Value/Ebitda-33.14
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.16
Revenue Forecast (FY)$4.68B
LendLease Group Business Overview & Revenue Model
Company DescriptionLendlease Group operates as an integrated real estate and investment company in Australia, Asia, Europe, and the Americas. It operates through Development, Construction, and Investments segments. The Development segment develops inner-city mixed-use developments, apartments, communities, retirement, retail, commercial assets, and social and economic infrastructure. The Construction segment provides project management, design, and construction services primarily in the commercial, residential, mixed use, defense, and social infrastructure sectors. The Investments segment owns and/or manages investments, including property and infrastructure co-investments, retirement livings, and the U.S. military housings. Lendlease Group was founded in 1958 and is headquartered in Barangaroo, Australia.
How the Company Makes MoneyLendLease generates revenue through a variety of channels, primarily by undertaking large-scale construction and development projects. The company earns money from project management fees, construction contracts, and sales of residential properties. Additionally, LendLease invests in its own developments, allowing it to benefit from long-term rental income and capital appreciation. Key revenue streams include residential and commercial developments, as well as infrastructure projects, where they often take on both equity and debt financing roles. Strategic partnerships with governmental agencies and private sector clients further enhance their revenue potential, as they secure contracts for major infrastructure projects. Their focus on sustainability and innovative design also allows them to tap into emerging markets and trends, contributing to their overall earnings.
LendLease Group Earnings Call Summary
Earnings Call Date:Feb 22, 2026
(Q2-2026)
| Next Earnings Date:Aug 17, 2026
Earnings Call Sentiment Neutral
The call balanced clear operational positives—notably strong Construction revenue growth (+22%), backlog expansion (+36%), stable Funds Under Management ($48.7bn), tangible liquidity ($3.3bn) and active development origination—with meaningful near-term financial headwinds driven by CRU impairments/write-downs, an IDC EBITDA decline (~40%), elevated gearing (32.9% excluding hybrids) and dependence on ~$3bn of asset transactions to hit the 15% gearing target. Management has concrete plans (cost savings, targeted capital recycling, internal CFO succession) and reiterated IDC guidance, but successful execution and timing of transactions are critical to restore profitability and leverage metrics.Q2-2026 Updates
Positive Updates
Progress on Capital Recycling (CRU) Transactions
Announced/completed exit of $2.8 billion of CRU assets and $500 million of new asset sales in the half; targeting a further $1.5 billion (and $3 billion total announced/active transactions) to complete in H2 FY'26 to support gearing reduction and potential buyback initiation.
Strong Construction Performance and Backlog Growth
Construction revenue increased 22% for the half, Construction EBITDA rose to $69 million with an EBITDA margin of 3.7%. New work secured of $4.0 billion and Australian backlog revenue of $8.0 billion (up 36% on FY'25) with ~ $15 billion of secured and preferred work (backlog + preferred).
Investment Platform Scale and Activity
Funds under management stable at $48.7 billion including $1.5 billion of additions; $2.9 billion of co-investment capital held; completed $4.4 billion of gross property transactions across the platform; gross co-investment yield steady at 4.4%.
Development Pipeline Progress
Development completions of $1.3 billion (including Victoria Cross); gross apartment presales increased to $3.3 billion (settlements weighted to FY'27, expected gross cash proceeds ~ $1 billion to Lendlease); secured $4.7 billion of new projects in the half and pursuing targets to reach $10+ billion for FY'26.
Liquidity and Balance Sheet Flexibility
Available liquidity of $3.3 billion (comprising $2.7 billion undrawn committed debt and $600 million cash) and recent hybrid issuances provided flexibility; reported net debt (excluding hybrids) closed at $3.3 billion.
Cost Savings and Overhead Reduction
Net overheads reduced $58 million to $197 million (run rate below $400 million). Pretax run-rate savings of $21 million actioned in the half; targeting $50 million of savings (full benefit expected in FY'27) and an exit overhead run rate ~ $350 million by end FY'26.
Maintained IDC Earnings Guidance and H2 Upside
IDC earnings guidance maintained at $0.28–$0.34 per security; first half IDC delivered $0.126 per security, implying H2 delivery of $0.154–$0.214 per security. Management expects stronger IDC H2 supported by operational delivery and key transactional completions.
Leadership Succession (Finance)
Planned CFO transition with Simon Dixon remaining in an advisory role (chairing CRU) and Andrew Nieland (internal candidate) appointed as incoming CFO effective 1 March, supporting continuity in execution.
Negative Updates
Statutory and Operating Losses
Statutory loss for the half of $318 million and a group operating (OPAT) loss after tax of $200 million, reflecting impairments, write-downs and limited transactional earnings in the period.
CRU Large Loss and Write-Downs
CRU reported an EBITDA loss of $284 million (prior period gain $34 million) — a swing of ~$318 million — which included a $136 million pretax write-down of Communities development land and a $44 million provision for tail risks in exited international construction businesses. Total noncash items associated with those actions were disclosed as $180 million.
IDC Segment EBITDA Decline
IDC segment EBITDA fell from $341 million to $204 million (down ~40%), driven by limited development completions and lower transactional earnings in investments in the half.
Investment Transaction Earnings Shortfall
Investments segment EBITDA was $101 million in the half, with prior period benefitting from transaction earnings (e.g., $129 million from Vita joint venture formation) that were not repeated; management EBITDA margins reduced modestly to 40.7%.
High Underlying Gearing and Dependency on Deals
Reported gearing was 25.8% including hybrid benefit (32.9% excluding hybrids) versus an underlying gearing target of 15% by end FY'26. Achieving that target is contingent on successful completion and timing of ~$3 billion of CRU and IDC transactions, posing execution/timing risk.
Elevated CRU Cost Base and Holding Costs
CRU incurred significant holding and operating costs (people, IT, legal, insurance) contributing to the large period loss; management acknowledged the CRU cost base remains elevated and will be progressively reduced as recycling completes.
Noncash Investment Property Revaluations and Impairments
The period included $118 million of noncash negative investment property revaluations and impairments (primarily in the U.S., U.K. and Singapore), contributing to the statutory loss and indicating valuation pressures in some markets.
Company Guidance
Management maintained IDC FY‑26 earnings guidance of $0.28–$0.34 per security (H1 delivered $0.126, so H2 must deliver $0.154–$0.214), gave no FY‑26 EPS guidance for CRU while it focuses on capital recycling, and reiterated targets to complete $3.0bn of announced/active transactions in H2 (including ~ $640m of contracted Crown Estate/TRX transactions, >$1.0bn in exclusivity for Keyton/UK BTR/APPF recap, plus Victoria Cross and others), with CRU targeting $2.0bn of recycling in FY‑26 (H1 achieved $500m; $1.5bn targeted for H2). They target underlying gearing of 15% by end FY‑26 (reported gearing 25.8% including hybrids; excluding hybrids 32.9%), expect reported net debt (ex‑hybrid) of $3.3bn to reduce as the $3.0bn of transactions settle, and retain available liquidity of $3.3bn (comprising $2.7bn undrawn facilities and $600m cash) with average debt maturity 2.5 years. Guidance factors in expected net production spend (~$400m IDC and ~$200m CRU), a $50m cost‑saving program with an exit overhead run‑rate target of ~ $350m by end FY‑26 (H1 net overheads $197m; $21m pretax run‑rate savings actioned in H1), and a medium‑term outlook of IDC recovery into FY‑27 (Development completions: H1 $1.3bn; FY‑27 target ~ $4.5bn; FY‑28 target $3.9bn), Construction revenues >$4.5bn in FY‑27 and >$5.0bn in FY‑28 with sustainable EBITDA margins of 3–4%, and Investments driving margin and FUM expansion (management EBITDA >40% in FY‑27 moving toward ~50% by FY‑30, FUM growth 8–10% p.a., FUM $48.7bn, $2.8bn available capital and $4.7bn of capital being raised).LendLease Group Financial Statement Overview
Summary
Overall fundamentals are pressured: revenue declined (-15.34%), margins are thin (gross margin 5.31%, net margin 2.96%), and EBIT margin is negative. The balance sheet is comparatively steadier with moderate leverage (debt-to-equity 0.79), but cash generation is weak with negative operating and free cash flows.Income Statement
The income statement shows a declining revenue trend with a negative revenue growth rate of -15.34% in the latest year. Gross profit margin is low at 5.31%, and the net profit margin is also modest at 2.96%. The EBIT margin is negative, indicating operational challenges. Despite these issues, the company managed to achieve a positive net income, which is a positive sign.45
Neutral
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio of 0.79, indicating manageable leverage. Return on equity is low at 4.40%, suggesting limited profitability from shareholders' equity. The equity ratio stands at a healthy level, showing a stable financial structure.55
Neutral
Cash Flow
Cash flow analysis reveals significant challenges, with negative operating and free cash flows. The free cash flow growth rate is highly negative, and the operating cash flow to net income ratio is also negative, indicating cash flow issues. However, the free cash flow to net income ratio is slightly above 1, suggesting some alignment between cash flow and earnings.40
Negative
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.87B | 7.60B | 9.22B | 10.40B | 8.97B | 9.77B |
| Gross Profit | 275.36M | 404.00M | 776.00M | 587.00M | 682.00M | 639.00M |
| EBITDA | -194.65M | 739.00M | -974.00M | 63.00M | 87.00M | 623.00M |
| Net Income | -135.17M | 225.00M | -1.50B | -232.00M | -99.00M | 222.00M |
Balance Sheet | ||||||
| Total Assets | 14.09B | 14.13B | 16.77B | 18.99B | 17.81B | 17.69B |
| Cash, Cash Equivalents and Short-Term Investments | 645.36M | 621.00M | 1.00B | 900.00M | 1.30B | 1.66B |
| Total Debt | 4.37B | 4.05B | 4.51B | 3.67B | 2.77B | 2.83B |
| Total Liabilities | 8.53B | 8.99B | 11.89B | 12.35B | 10.84B | 10.74B |
| Stockholders Equity | 5.53B | 5.11B | 4.84B | 6.62B | 6.94B | 6.93B |
Cash Flow | ||||||
| Free Cash Flow | -830.55M | -783.00M | -118.00M | -568.00M | -920.00M | 347.00M |
| Operating Cash Flow | -823.61M | -775.00M | -55.00M | -486.00M | -835.00M | 468.00M |
| Investing Cash Flow | 538.80M | 928.00M | -552.00M | -758.00M | 554.00M | -214.00M |
| Financing Cash Flow | 176.09M | -532.00M | 723.00M | 723.00M | -108.00M | -148.00M |
LendLease Group Technical Analysis
Negative
3.38
Price Trends
3.31
Negative
3.41
Negative
3.47
Negative
Market Momentum
-0.12
Positive
28.01
Positive
5.92
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LLESY, the sentiment is Negative. The current price of 3.38 is above the 20-day moving average (MA) of 3.15, above the 50-day MA of 3.31, and below the 200-day MA of 3.47, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 28.01 is Positive, neither overbought nor oversold. The STOCH value of 5.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LLESY.
LendLease Group Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $528.00M | 11.95 | 9.75% | 11.98% | -21.98% | -25.08% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $4.33B | 34.37 | 3.78% | ― | 59.27% | 240.63% | |
63 Neutral | $2.26B | -7.88 | -8.38% | 13.10% | -3.57% | -104.55% | |
56 Neutral | $1.11B | ― | -10.15% | 2.09% | 5.08% | 41.21% | |
50 Neutral | $1.96B | -20.16 | 4.37% | 4.16% | -17.89% | ― | |
45 Neutral | $84.86M | -1.53 | -7.12% | 7.97% | -28.13% | 62.49% |
* Real Estate Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.