Morningstar flags weak sales for Australia's Lifestyle Communities, lowers fair value estimate

Lifestyle Communities

09/07/2025 22:54

** Morningstar downgrades fair value estimate for Lifestyle Communities LIC.AX by 28% to A$6 per share, increases 'Uncertainty Rating' to Very High from Medium

** Associates downgrade on probability of LIC losing its appeal with regard to a court slashing the exit fee co charges  and fewer new home sales in FY2026 and 2027

** Expects co to pause dividends while uncertainty persists and forecast dividends suspension in FY2026

** Sees a weak FY26, with new home sales to be about 5% less than FY25

** Says reputational damage may persist for longer with customers being reluctant to buy LIC homes while the matter is before the courts

** Expects recovery in sales volumes over FY27, in case co wins the appeal

** 4 out of 8 analysts rate the stock 'buy' or higher, 3 rate it 'hold' while 1 rates it sell; median price target is A$8.45 - data compiled by LSEG

** YTD, LIC down 48.4% as of last close

 (Reporting by Jasmeen Ara Shaikh in Bengaluru)

 ((JasmeenAraIslam.Shaikh@thomsonreuters.com;))