In key news on Australian stocks, Goodman Group (AU:GMG) reported a strong Q3 update for FY24, signalling optimism for its business for the full year. The company upgraded its operating EPS growth outlook to 13% for FY24, marking its second upgrade this year. Initially, the company targeted a 9% growth rate, subsequently raising it to 11% following the release of its half-year results in February.
In reaction to the positive update, GMG shares gained around 1.5% during early trading hours, reaching an all-time high. However, the stock later retraced its gains and traded down by 0.26%.
Goodman is an industrial real estate group engaged in developing and managing high-quality properties.
Highlights from Goodman’s Q3 Update
Overall, in the third quarter, Goodman benefited from higher demand and limited supply, resulting in solid occupancy rates and income growth, despite macroeconomic uncertainties.
In its Partnerships, Goodman achieved a 4.9% like-for-like growth in NPI (net property income) on properties and maintained a strong occupancy rate of 98%.
Also, the company completed developments totalling $800 million, with commitments secured for 96% of year-to-date completions. The company’s total portfolio grew by $1.5 billion to reach $80.5 billion as of March 31, 2024.
Upbeat Outlook
Goodman highlighted that moving forward, the demand for traditional logistics and warehouses is gradually easing back towards pre-pandemic levels, indicating a shift towards more normalized conditions. Additionally, there’s a significant demand for data centers, propelled by robust growth in cloud and AI globally.
In terms of rental income, the average anticipated rent adjustment to market rates across its global portfolio remains at approximately 25%. This revision is projected to drive similar like-for-like NPI growth levels over time.
Is GMG a Good Stock to Buy?
According to TipRanks’ consensus forecast, GMG stock has received a Moderate Buy rating based on eight recommendations, including five Buys. The Goodman share price forecast is AU$29.73, which is 13% below the current trading level.
Year-to-date, GMG stock has gained 36.5%.
