There are plenty of ASX 200 shares to choose from, but one of the best right now could be named below.
That's the view of analysts at Bell Potter, which have become bullish on this incredible share this week.
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Which ASX 200 share?
The share in focus is industrial property giant Goodman Group (ASX: GMG).
Bell Potter is feeling positive about the company's long term outlook thanks to its transition to data centres. It commented:
We see a strong long-term pathway ahead as historically demonstrated by a best-inclass Management team, but the business transition towards increased data centre does come with an associated risk profile / requirement of capital to fund.
The market may look through the composition of earnings in FY26/27 (increased performance / restructuring fees) as development takes time to ramp-up given the timeframes required to develop turnkey DCs, but while competition is increasing from major sponsors GMG is well placed given its landbank on foot. Track record suggests we should see EPS upgrades in FY26 (initial guidance could be below VA cons.) and initiate at Buy with GMG trading at a -7% discount to its 5yr PE rel.
What else?
The broker feels that Goodman's data centres are well-placed to benefit from AI and the cloud computing boom. It adds:
AI workloads will accelerate the demand for global DC capacity, which is forecast to grow at a +15% CAGR to 2027, supported by cloud growth. Indeed, hyperscaler capex budgets reflect material forward spend approaching US$400bn pa.
And while we think GMG's best-in-class tenant relationships, historic industrial consistency, and strong Management team provide confidence of prospective delivery, the cheque sizes are growing materially, with production time frames expanding (>2yrs, pushing towards 3yrs). Great profit on offer, but greater risk
Time to buy
According to the note, the broker has initiated coverage on the ASX 200 share with a buy rating and $39.35 price target.
Based on its current share price of $34.69, this implies potential upside of 13.5% for investors over the next 12 months.
Bell Potter concludes:
GMG has a strong track record of delivering well above initial guidance. The pivot to data centres (46% of WIP vs. 30% FY23) could yield meaningful gains in the coming years as DCs start to complete (potentially realised ahead of time), but we watch the composition of earnings (if cash-backed, or one-off) given GMG's fair valuation.
