Goodman (ASX:GMG) share price storms 5% higher on earnings guidance upgrade

Goodman shares are booming on Tuesday…

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The Goodman Group (ASX: GMG) share price is storming higher on Tuesday morning.

At the time of writing, the global integrated property company’s shares are up 5.5% to $23.50.

Why is the Goodman share price rising?

Investors have been bidding the Goodman share price higher today following the release of its first quarter update.

According to the release, Goodman has made a strong start in FY 2022. This has been driven by the continuation of structural changes, significant customer demand, and intensification of use of sites in Goodman’s target markets.

Management notes that the consistent execution of its strategy has resulted in increased transactional activity and higher earnings certainty for the full year. This has led to Goodman upgrading its operating earnings per share growth guidance for FY 2022 to be in excess of 15%. This compares to prior guidance of 10% growth.

Other key metrics of note in Q1 include 3.2% like for like net property income (NPI) growth, 98.4% occupancy, $12.7 billion of development work in progress (WIP), and $62 billion of total assets under management (AUM).

Pleasingly, management notes that its outlook remains strong and expects its AUM to continue growing to around $70 billion by June 2022.

Digital economy drives strong growth

Goodman’s CEO, Greg Goodman, commented: “The results of the deliberate positioning of our portfolio over the last decade to adapt to and leverage the changes in the digital economy, are now being realised. Customer demand for high- quality properties close to consumers has never been greater.”

“This is resulting in rental growth, increased development activity, stronger than expected performance from our Partnerships and generally higher levels of profitability, leading to upgraded earnings guidance for FY22,” he concluded.

The Goodman share price is now up 22% in 2021.

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.

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