Goodman Group (ASX: GMG) shares are under a lot of pressure on Thursday.
In afternoon trade, the industrial property giant's shares are down 7% to $28.88.
Image source: Getty Images
Why are Goodman shares sinking today?
Investors have been selling the company's shares today following the release of its half-year results.
For the six months ended 31 December, Goodman reported a 1.5% decline in operating profit to $1.2 billion and an 8.3% decline in operating earnings per share (OEPS) to 58.5 cents.
What else did it report?
A key theme of the result was accelerating data centre activity.
Work in progress (WIP) rose to $14.4 billion across 51 projects, with data centres now accounting for 73% of total development WIP. Goodman's global power bank increased to 6.0 GW across 16 major cities, with around 0.5 GW of power expected to be in development by June 2026.
Management advised that it expects WIP to increase to approximately $18 billion by the end of FY 2026, reflecting growing customer demand for digital infrastructure.
However, management noted that development earnings are expected to be skewed toward the second half of FY 2026. That timing could be weighing on sentiment and Goodman shares today.
Why the market reaction?
While the result was operationally solid, a few factors may be behind the decline.
Firstly, Goodman has a habit of upgrading its guidance as the financial year progresses. It is possible that the market was anticipating an upgrade today.
However, there was no upgrade to its FY 2026 OEPS guidance. Management continues to expect OEPS growth of 9%.
Furthermore, with its OEPS down 8.3% in the first half, the market may not even be confident that Goodman will be able to achieve its current guidance, let alone upgrade it.
Nevertheless, the company's CEO, Greg Goodman, remains confident. He said:
Demand for digital infrastructure in our markets is expected to materially exceed supply over the foreseeable future. Goodman has a significant opportunity to develop into this strong demand, given our metropolitan sites, significant power bank, strong capital position and expertise in complex infrastructure. The scale and locations of our powered land bank is rare. Construction-ready powered sites take many years to acquire, plan, secure power, undertake infrastructure works, and ultimately deliver.
Demand for logistics is increasing, with commencements expected to accelerate over the next 12 months. Together these are expected to drive our growing development activity. The Group is targeting FY26 operating EPS growth of 9.0%.
