Top broker tips Goodman Group (ASX:GMG) share price to surge higher

Can the Goodman share price keep on rising? This broker thinks it can…

| More on:
Man holding phone in front of stocks graphic

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Goodman Group (ASX: GMG) share price is edging higher on Friday.

In afternoon trade, the commercial property company's shares are up slightly to $22.70.

This means the Goodman share price is now up 17% since the start of the year.

Why is the Goodman share price outperforming in 2021?

Investors have been bidding the Goodman share price higher this year on the belief that it would deliver a strong result in FY 2021.

This turned out to be accurate, with the company releasing a result ahead of the market's expectations this week.

In case you missed it, Goodman reported a 15% increase in operating profit to $1.22 billion and operating earnings per share (EPS) of 65.5 cents.

This was driven by a 12% increase in total assets under management (AUM) to $57.9 billion, a portfolio occupancy rate of 98.1%, and like-for-like net property income growth of 3.2%.

One disappointment, though, was that its guidance for FY 2022 was below the market's expectations. However, it is worth noting that Goodman has a track record of under promising and over delivering.

Can its shares go even higher?

The good news is that the team at Citi believe the Goodman share price is still good value at the current level.

This morning the broker retained its buy rating and $26.00 price target on the company's shares.

Based on the current Goodman share price, this implies potential upside of 14.5% over the next 12 months before dividends.

Citi said: "GMG's FY21 EPS was +2% above guidance and +1%/+0.5% above consensus/Citi, with the beat vs our estimate driven by higher investment income and lower interest expense/tax. FY22 EPS guidance was introduced at 10% growth or 72.2c, -2% below consensus and -3.5% below our prior estimate. However, we see upside to guidance and the share price, and re-iterate our Buy rating."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

The words short selling in red against a black background
Share Market News

These are the 10 most shorted ASX shares

Let's see which shares short sellers are targeting this week.

Read more »

Woman in celebratory fist move looking at phone
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

A female financial services professional with a manicured black afro hairstyle turns an ipad screen to show a client across the table a set of ASX shares figures in graph format.
Share Market News

Record CBA share price and blockbuster merger push ASX 200 financials sector to the top

ASX financial stocks led the 11 market sectors last week with a 1.95% gain.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Market News

CBA Shares in focus: How Australia's most valuable company is using AI to compete

Could AI initiatives drive CBA shares higher?

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Broker Notes

These ASX 200 shares could rise 20% to 50%

Looking for big returns? Brokers think these shares could do the job.

Read more »

asx share price represented by cartoon letters spelling the word FOMO
Share Market News

What did Macquarie's "FOMO Meter" reveal about the stock market in May?

Is the market getting frothy or is there still room to climb?

Read more »

Market up or down
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough end to the week...

Read more »

Man in an office celebrates at he crosses a finish line before his colleagues.
Share Gainers

4 ASX 200 shares racing ahead of the benchmark this week

ASX investors sent these four stocks soaring 12% to 18% this week. But why?

Read more »