Goodman Group

¹Ratios such as P/E, EPS, and ADY are on a Trailing Twelve-Month basis, which is subject to change based on certain factors such as company performance and stock price changes.

²ROE has been taken for the Half-Year Ending December 2021.

GMG Details

Insights of Q3FY22: Goodman Group (ASX: GMG) operates an international industrial and business space property, development and funds management business. The below picture gives an overview of business performance in Q3FY22:

Quarterly Summary (Source: Analysis by Kalkine Group)

Key Risks: The company is exposed to risks arising from inefficient liquidity as its business requires an ample amount of funds to run operations smoothly. In addition, the business could be impacted by regulatory uncertainties.

Outlook: The company anticipates EPS growth of 23% in FY22. The company believes that the AUM growth would primarily be aided by development completions over the next few years and is likely to surpass the toll of $70 billion by 30 June 2022.

Stock Recommendation: Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Source: Analysis by Kalkine Group

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation: The stock of GMG is trading near its 52-week low level of $16.810, offering a decent opportunity for accumulation. The stock has been corrected by ~10.98% in the past month. The stock has been valued using a P/E multiple-based illustrative relative valuation method and arrived at a target price of low double-digit (in percentage terms). The company might trade at a slight discount to its peers, considering the COVID-19 uncertainties and rising cash cycle days etc. For valuation, a few peers like Shopping Centres Australasia Property Group Re Ltd (ASX: SCP), Charter Hall Retail REIT (ASX: CQR), and LendLease Group (ASX: LLC) have been considered. Considering the expected upside in valuation, rising AUM, decent progress in Q3FY22, optimistic long-term outlook, and current trading levels, we recommend a ‘Buy’ rating on the stock at the closing market price of $17.110, down by ~2.451% as of 17 June 2022.

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

GMG Daily Technical Chart, Data Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the Valuation has been achieved and is subject to the factors discussed above. 

Technical Indicators Defined: -

Support: A level where-in stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

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