Brokers have upgraded these two S&P/ASX 200 Index (ASX: XJO) stocks after recent positive updates from both businesses.
Sometimes a business announcement is positive for a company and can make the current share price cheap. A decline in the share price can also open up value in the minds of some investors.
Let's look at which two ASX 200 stocks have just been upgraded.
Perpetual Ltd (ASX: PPT)
The broker Bell Potter has put a buy rating on Perpetual shares after the business announced the sale of its wealth management and corporate trust businesses via a scheme of arrangement for A$2.175 billion in cash.
In Bell Potter analysts' eyes, the sale was a "positive", according to reporting by The Australian, with the broker saying the decline was "short-signed".
The expectations for this sale were reportedly between $1.5 billion and $1.9 billion. Bell Potter said:
More to the point, we had assumed that our top of range $1.9bn sale, would incur a $480m tax liability, which may not be the case.
The newspaper reported Bell Potter's analysis showed the ASX 200 stock's deal was a demerger rather than a straightforward sale. The Australian reported:
…a new head company was being created and the asset management unit would be demerged and returned to shareholders who would receive the KKR sale proceeds minus the transaction costs and repaid debt.
Bell Potter said questions on tax and transaction costs missed the point.
Goodman Group (ASX: GMG)
Macquarie's price target on Goodman shares has hiked by 4.4% to $36.37.
A price target is where a broker thinks the share price will be trading 12 months from now. Therefore, Macquarie suggests Goodman shares could rise by more than 8% in the next year.
Why the positivity? Goodman just released its FY24 third-quarter update.
The ASX 200 stock reported, as at 31 March 2024, that it had $12.9 billion of development work in progress (WIP) across 82 projects. Data centres under construction currently represent approximately 40% of WIP. In the latest quarter, it completed $0.8 billion of developments, with 96% of year-to-date completions committed. The business now has a $80.5 billion total property portfolio.
Goodman's rental performance continues to be strong, with 4.9% like-for-like net property income growth on properties in its partnerships.
The good performance enabled the business to increase its FY24 operating earnings per security (EPS) growth to 13%.
