Goodman: Riding the Data Center Wave With Prowess; Valuation Up 15%

We raise our fair value estimate for Goodman Group by 15% to AUD 24 per security after reassessing the opportunity the group has in data centers. We still expect logistics investment to moderate, but data centers have reached 40% of work-in-progress and will likely exceed half of WIP in the next couple of years. These projects will likely be larger, take longer, require more capital expenditure, and be more profitable than we previously attributed. Despite our valuation increase, Goodman's securities screen as overvalued, with the upside seemingly priced in but not the risk.