Lendlease Shares Jump Nearly 5% as Beaten-Down Property Giant Bounces Despite a Brutal 57% One-Year Slide

SYDNEY — Shares of Lendlease Group climbed nearly 5% on Monday, making the embattled property developer one of the best performers on the S&P/ASX 200 index during a cautious session ahead of an expected interest rate increase from the Reserve Bank of Australia.

Lendlease shares rose 11 cents, or 4.8%, to 2.40 Australian dollars in afternoon trading, after moving between A$2.30 and A$2.41. About 1.2 million shares changed hands, giving the company a market value of roughly A$1.7 billion.

The gain came as the broader market slipped, with the ASX 200 down about 0.2% late Monday morning as investors positioned for the central bank's decision on Tuesday.

It was not immediately clear what drove Monday's move.

A long slide

Even with Monday's bounce, Lendlease remains one of the worst-performing large Australian stocks over the past year. The shares are down nearly 57% over 12 months.

The decline has been driven by losses, rising debt and a lengthy restructuring as the company exits most of its overseas operations to refocus on Australia.

In February, Lendlease shares fell to their lowest level since December 1987 after the company swung to a first-half loss, closing 7.2% lower that day.

The selling continued after the company's full-year results in August. Lendlease reported a statutory loss for fiscal 2026, and its shares closed at A$2.87 on results day, down more than 44% since the start of the year. The day after the results, Citi downgraded the stock to neutral from buy, with a price target of A$3.10.

New leadership

Investors are looking to new leadership to turn the company around.

In June, Lendlease named Nick O'Neil, head of Australian real assets at superannuation fund AustralianSuper, as its new group chief executive and managing director. O'Neil, who spent 17 years at Macquarie Group, succeeded longtime CEO Tony Lombardo, who left to become chief operating officer of Singapore-listed Frasers Property.

Announcing the appointment, Chairman John Gillam said O'Neil "is ideally positioned to lead the next phase of revitalising and strengthening Lendlease."

Lendlease shares rose about 4.6% on the day the appointment was announced, a rare bright spot at the time.

Debt in focus

The company's balance sheet remains a key concern for investors.

Lendlease has been selling assets to reduce risk and debt, completing billions of dollars in transactions since unveiling a new strategy in May 2024. But gearing, a measure of debt relative to assets, has risen rather than fallen.

Morgan Stanley noted earlier this year that gearing of about 34% was well above the 22.9% level when the strategy was announced, despite A$2.3 billion of asset sales.

The company has kept guidance for its core investment, development and construction business at 28 to 34 cents per security for fiscal 2026.

Turnaround test

Analysts say the market wants proof that the strategy is working, including completed asset sales and falling debt, before rewarding the stock with a sustained recovery.

Bulls point to a simplified business focused on Australia, a maintained investment-grade credit rating and new leadership. Skeptics note that the company still faces execution risks, including delayed asset sales and a weak property market.

Rising interest rates add to the pressure. The Reserve Bank is widely expected to raise its cash rate by 25 basis points on Tuesday to 4.85%, an 18-year high, which could weigh further on property developers and housing activity.

What's next

Lendlease will hold its annual general meeting on Nov. 25, where investors will be watching for updates on O'Neil's strategy, asset sales and debt reduction. The company's next earnings report, for the first half of fiscal 2027, is scheduled for Feb. 22.

Until then, the stock's direction is likely to depend on progress in cutting debt and on the path of Australian interest rates.