Management’s strategy is improving the earnings profile, de-risking the business and shifting into an underpenetrated market segment. Goodman Group is well placed to keep delivering attractive earnings growth over the medium term. From a valuation perspective, we do not see the stock as cheap. Our sell recommendation is not a reflection of the quality of the business, earnings outlook or capital position. It is simply that we now see the stock as being expensive. The 2019 financial year outlook doesn’t deserve a price-to-earnings ratio of about 21, especially with competitors such as Coles, Aldi, Costco and IGA all on an improving trend.
$1.66 $10.25 $3.49 $28.92