Putting Customer First Provides Goodman With Long Growth Runway. FVE Increases 14% to AUD 10.20

Goodman Group's fiscal 2018 operating earnings rose 8% to AUD 46.7 cents per security, or cps, marginally above guidance and our forecast. Compositionally, this was a strong result, with Goodman beating our expectations for growth in assets under management, or AUM, and margins on development completions. Upgrades to our forecasts for management fees, development margins and rents, results in a 6% and 12% upgrade, respectively, to our fiscal 2020 and 2021 EBIT forecasts. Our fair value estimate for narrow-moat-rated Goodman increases 14% to AUD 10.20. Goodman screens as fairly valued, currently trading at AUD 10.60. Guided fiscal 2019 earnings (adjusted for forthcoming dilution of staff options) is AUD 50.0 cps, implying growth of 7% and a forward P/E of 21.