Jarden upgrades Goodman Group to 'buy', lifts price target
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The news: Jarden analysts have upgraded their outlook on shares of Goodman Group saying robust data centre demand is providing greater visibility for the industrial property investor’s earnings.
The numbers: The analysts lifted their 12-month price target to $40 a share, from $37.60 and upgraded their rating to ‘buy’ from ‘neutral’.
Goodman shares were up nearly 2% to $34 in early trading on the ASX and over the last 12 months have surged 47.3%.
The context: Goodman shares have underperformed the REIT sector by 10% over the last three months despite growing visibility of both duration and magnitude of earnings driven by the data centre development pipeline, the analysts noted.
They expect Goodman Group to be able to deliver its usual 11% to 15% annual EPS growth for longer, with the chance of positive earnings surprises now greater.
What they said: “With $85 billion of data centre projects in the pipeline, the market is potentially underestimating how work in progress will grow over the next few years, which we estimate could reach ~$30 billion over the next 12 to 24 months,” the analysts said in a note.
The source: Jarden Research
