** Morgan Stanley says Australia's Stockland SGP.AX and Mirvac MGR.AX well placed to meet FY26 settlement targets, with 51% and 39% of guidance already covered by pre-sales

** Prefers SGP over MGR, citing greater residential exposure, shorter sales-to-settlement cycle, and cheaper valuation

** Notes 2H25 residential deposits jumped 36% vs H1 for the sector; SGP sees deposits up 42% aided by Lendlease Communities integration, MGR up 22% from stronger masterplanned community sales in Victoria and Queensland

** Says both developers hit their highest six-monthly sales since 2021

** Sees SGP well placed to beat top-end guidance of 8,500 settlements if 1H26 sales exceed 2,350 lots per quarter; MGR can reach target if quarterly sales lift to around 760 lots

** SGP currently up 0.6% while MGR has gained 0.4% on Thuresday

** MS also likes GemLife Communities GLF.AX for its high development exposure and conservative FY25 guidance

(Reporting by Rishav Chatterjee in Bengaluru)

((Rishav.Chatterjee@thomsonreuters.com;))