Goodman Group

GMG: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$11.00	Hnmsj	Rrgybrbl

Transferring Coverage of Narrow-Moat Goodman Group; Our AUD 12 Fair Value Estimate Is Unchanged

Johannes Faul

May 24, 2019

We confirm our AUD 12 per share fair value estimate for Goodman Group as we transition coverage to a new analyst. Our narrow moat, medium fair value uncertainty, and Standard stewardship ratings are unchanged. At current prices, the stock is trading 15% above our intrinsic valuation. Our fair value estimate implies fiscal 2019 price/earnings of 24 and enterprise value/adjusted EBITDA of 22. Our valuation is derived using a discounted cash flow methodology, using a 9% cost of equity and a weighted average cost of capital of 8.0%. Goodman’s narrow economic moat is sourced from switching costs and efficient scale benefits.

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