Goodman Group (ASX: GMG) shares have been out of form this year.
So much so, on a 12-month basis, the industrial property giant's shares have lost around 20% of their value.
But with Goodman's FY 2026 results out of the way, is now a good time to buy its shares? Let's see what the team at Bell Potter is saying.
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What is Bell Potter saying?
Bell Potter notes that Goodman delivered a result in line with expectations for FY 2026. It commented:
GMG announced its FY26 result with operating EPS of 129.9c (+10% y/y growth) in line with BPe and VA consensus, c.1% above full year guidance. FY27 operating EPS guidance established at +9% growth y/y which implies 141.6c (BPe 141.2c (+9% y/y), VA consensus 143.7c (+11% y/y)), with DPS guidance of 30.0c maintained (in line with BPe, VA consensus for 30.4c).
The broker also highlights that Goodman's development work in progress (WIP) has increased materially. It adds:
Development WIP has increased a material +37% h/h with data centres now comprising 78% of the total WIP (was 57% pcp). This is driving development yield on costs higher to 8.2% (was 7.5% pcp), as well as margins (not quoted, but GMG is ULIRR aware) and production rate (>$8b pa vs. <$6bn pa FY25).
Goodman shares downgraded
Despite the positives from the result, Bell Potter has become less bullish on the investment opportunity here.
According to the note, the broker has downgraded Goodman shares to a hold rating (from buy) with a reduced price target of $32.65 (from $33.95). This compares to its current share price of $28.78.
Commenting on the downgrade, Bell Potter said:
We downgrade to Hold (was Buy). GMG has a long and rich history in customer and capital partner-focused execution of quality product delivery, and while we continue to expect that to be the case, we do think that FY27 is likely another year of building blocks that requires substantial operating cash outflow with milestones (customer leasing, partnerships, commensurate cash returns on cost) that will take some time to build out amongst a competitive peer set.
We adjust our FY27-FY29 EPS estimates by -1% to 1% to reflect: (1) half year actuals; (2) development WIP / DC capex and returns; and (3) net borrowing gains.
