If you want to give your portfolio a big boost, then there's an ASX All Ords share that Goldman Sachs thinks could do it.
That share is Qualitas Ltd (ASX: QAL), which is an alternative real estate investment manager focused on private credit and equity across commercial real estate (CRE) sectors.
What is Goldman saying about this ASX All Ords share?
According to a note, the broker has this ASX All Ords share on its widely followed conviction list with a buy rating and $3.80 price target.
Based on the current Qualitas share price of $2.60, this implies potential upside of 46% for investors over the next 12 months.
Goldman also expects dividend yields of 1.5% in FY 2023 and 2.3% in FY 2024.
Why is it bullish?
The note reveals that Goldman has been impressed with the progress the company has made since listing on the Australian stock exchange 18 months ago. It commented:
Since listing in December 2021, QAL has demonstrated the ability to consistently win large, new mandates with global institutions across a broad range of CRE strategies. FUM has grown by 43% since listing, and we expect further growth, driving operating leverage in the business. We see a number of catalysts for the company (both micro and macro) in the short to medium term.
What are those catalysts, I hear you ask! Well, the broker went on to explain:
Catalysts: 1) August FY23 results; 2) Potential execution of ADIA's options representing up to 9.99% of fully diluted equity contingent on an additional A$1bn of FUM; 3) Activation of the further tranches in the recently announced private credit fund, representing up to A$780mn; 4) Further fundraising in the GQ BTR platform; and 5) Lower (15% vs. 30 prev.) withholding tax on newly constructed BTR projects after 1 July 2024.
All in all, Goldman believes the company is positioned to grow its funds under management to approximately $11 billion in FY 2030. This compares to $5.8 billion at the end of the first half.
But it gets better. its analysts believe operating leverage will lead to a significantly wider EBITDA margin by the end of the decade, which will be a big boost to its dividend. The broker is forecasting an EBITDA margin greater than 60% by then.
All in all, Goldman appears to believe this ASX All Ords share could be a quality buy and hold option for investors.
