LendLease Group's stock plummeted 5.02% during intraday trading on Wednesday, marking a significant downturn for the Australian real estate company.

The sharp decline followed a report from Morgan Stanley analysts who lowered their price target for LendLease to A$3.25 from A$3.89 while maintaining an 'equal-weight' rating. The brokerage also significantly widened its forecast for the company's FY26 net loss after tax to A$352 million from A$119 million projected earlier.

Morgan Stanley expressed concerns that LendLease's target of reducing gearing to approximately 15% by the end of June 2026 is unlikely to be achieved unless the company receives substantial cash proceeds from uncontracted sales. The stock has declined 49% year-to-date, reflecting ongoing challenges in the company's integrated real estate business.