GPT Group (ASX: GPT) shares may be up 25% since the start of the year, but that doesn't mean it is too late to invest.
In fact, the team at Macquarie Group Ltd (ASX: MQG) believes that there is still potential for some major returns over the next 12 months.
What is the broker saying about this ASX 200 stock?
Macquarie was pleased with the property company's recent update and notes that it has upgraded its guidance once again. It said:
The upgrade from 33.2cps to 34.0cps represents an additional $15m in FFO or ~2.4%. The 3Q upgrade follows GPT upgrading FY25 guidance at the 1H25 result, with FY25 guidance now upgraded by +2.7-4.6% over the past 9 months.
We understand the 3Q upgrade is driven by stronger underlying business performance, particularly management operations and a lower cost of debt. At the 1H25 result, we previously estimated GPT should have seen a 1.6% tailwind to FFO from a lower WACD (5.3% vs 5.5% initial expectation). This implies a 1.1-3.0% improvement in the underlying business vs. initial expectations.
Another positive that Macquarie highlights is that office occupancy is tracking ahead of its prior expectations. It adds:
Office occupancy increased modestly to 95.2% from 94.4% at Jun-25 (incl. HoAs). We had expected occupancy to remain broadly stable in 2H25, with GPT previously indicating 2.1% of expiry in 2H25.
Big potential returns
In light of the above, Macquarie remains very positive on the ASX 200 stock and has reaffirmed its outperform rating with a slightly improved price target of $6.27.
Based on its current share price of $5.53, this implies potential upside of 13% for investors between now and this time next year.
In addition, the broker expects aa dividend of 25.7 cents per share in FY 2026. This represents a 4.6% dividend yield, which lifts the total potential return beyond 17%.
Commenting on its outperform rating, the broker said:
Outperform, $6.27 TP. Execution of strategy offers upside potential to valuation in the medium to long term. From here, we believe evidence of growth in third-party FUM will be key.
Earnings changes: FY25/26/27 FFO +2.4%/+4.2%/+3.9% driven by improved office occupancy assumptions and flow-on annualisation impacts. Valuation: TP broadly unchanged at $6.27 (prior: $6.26). Catalysts: Announcement of successful unlisted third-party capital raise.
Overall, this could make GPT Group a top pick for investors that looking for a combination of double-digit upside and an attractive dividend yield.
