---
endpoint: analytics
pattern: Property
status: done
latency_ms: 169020
conversation_id: f84123ac-620a-4753-bd8f-e87064a7b787
citations: 11
created: 2026-05-31 20:47:11Z
---

# Is CLSA incrementally more positive/negative on Goodman. If so, why?

## CLSA on Goodman Group (GMG AU) — Incrementally MORE POSITIVE

CLSA is **incrementally more positive** on Goodman. The clearest evidence is a **rating upgrade from Outperform to High-Conviction Outperform on 7 March 2025**, which has been reiterated through the latest available note dated **28 May 2025**. Target price has been managed within a tight band (A$41.04 → A$39.77 → A$38.54), but the conviction tier has moved up and the analyst (James Druce) frames the news-flow setup as "trending positively."

### Rating & Target Price Trajectory

| Date | Note Title | Rating | TP (A$) |
|---|---|---|---|
| 19-Feb-2025 | Surprise raising ahead of DC starts | **O-PF** | 39.77 (trim from 41.04) [5] |
| **7-Mar-2025** | **Sifting through the noise; upgrade** | **HC O-PF (UPGRADE)** | **39.77** [2] |
| 15-May-2025 | Looking for a signal | HC O-PF (reiterate) | 39.77 [6] |
| 28-May-2025 | Roadmap becoming clearer | HC O-PF (reiterate) | **38.54** (-3%) [1] |

### Why More Positive — The Three Drivers

**1. Share-price correction deemed "overdone" — March upgrade trigger**

CLSA explicitly framed the move to High-Conviction Outperform as a response to a -19% sell-off vs the market (-14% underperformance) driven by the DeepSeek announcement, the Microsoft 200MW lease-cancellation report, and the surprise A$4bn equity raise. CLSA viewed the sell-off as **"a storm in a teacup"** [3] — DeepSeek's cost gains were "in line with the industry trend over the past couple of years" and actually pull *forward* inference demand, which "suits Goodman's metro data centre (DC) pipeline"; the Microsoft lease cuts were judged "idiosyncratic to its strategy and not indicative of an inflection point in demand." [3]

CLSA's bottom-up work flagged **5% upside risk to FY25 consensus earnings** while the buy-side was positioning for downside [4].

**2. A clearer "news-flow roadmap" post 3Q25 (May 28 note)**

The most recent note argues that "3Q confirmed the trough in development work in progress (WIP) and asset values, and now we argue there is a roadmap for news flow which is trending positively." [1] Specifically, CLSA sees three sequential catalysts:

- **August 2025** — significant data centre development starts dominating news flow
- **November 2025** — earnings de-risking events from new DC capital partnerships
- **February 2026** — pre-lease news [1]

Reinforcing this, 3Q25 disclosure confirmed **A$1.9bn in development starts on a 9% yield**, DC development yield-on-cost guidance of 9-12% (logistics 7-8%), logistics cap rates "starting to compress again," and aggressive restocking of the logistics development pipeline. [9]

**3. Earnings growth trajectory still intact and back-end loaded**

CLSA now forecasts **10% EPS growth in FY25, 12% in FY26, jumping to 15%+ from FY27** [7]. The earnings outlook is underpinned by the 5GW data centre pipeline with **an end value of A$100-A$200bn over 10 years**, with the initial 0.5GW set to start before June 2026. CLSA writes: "At a minimum, the data centre pipeline underwrites CLSAe double-digit earnings growth over the next five years." [8]

### Nuances — Where Positivity Was Tempered

The May 28 note is not unambiguously bullish on every line:

- **TP trimmed -3% to A$38.54** as CLSA respected management not upgrading at 3Q (against historical pattern), citing tariff-driven delays in joint-venturing the US logistics development portfolio and a slower 9-12 month timing between DC build start and lease (vs prior pre-lease model). [7]
- **Earnings cut 1-4%** to reflect the same dynamics, though FY27 growth jumps to 15%+ [7].
- **No major upgrade signal at 3Q** — at the May 15 preview, CLSA had been hoping for a 1% EPS upgrade as a "positive signal" of FY26 visibility [10]; management did not deliver it.

So the *positivity is on conviction tier and news-flow setup, not on earnings or TP*. The mid-cycle target trim is a marking-to-market of execution timing; the conviction step-up reflects CLSA's view that the share-price correction created an entry opportunity into a still-intact multi-year DC growth story.

### Bottom Line

**Direction**: Incrementally **more positive** — Outperform → High-Conviction Outperform (March 7, 2025), reiterated twice since. The conviction step-up dominates the small TP/EPS trim.

**Why**: (i) -19% share-price correction post DeepSeek/Microsoft/equity raise judged "overdone" with demand outlook unchanged; (ii) 3Q25 confirmed WIP and asset-value trough; (iii) a sequenced August/November/February news-flow roadmap (DC starts → capital partnerships → pre-leases) into FY26; (iv) the 5GW / A$100-A$200bn DC pipeline still underwrites double-digit EPS growth for 5+ years with FY27+ accelerating to 15%+.

**Open risk per CLSA**: execution on the 5GW pipeline — leasing, development, capital raising. Delays in DC starts are the key downside given the elevated PE (25x, ~38% premium to ASX 200) [11].

---
**Sources**
[1] Goodman - HC O-PF (Roadmap becoming clearer) — CLSA (28 May 2025) — 607960765LinqAlpha.PDF
[2] Goodman - HC O-PF (Sifting through the noise; upgrade) — CLSA (7 Mar 2025) — 607952517LinqAlpha.PDF
[3] Goodman - HC O-PF (Sifting through the noise; upgrade) — CLSA (7 Mar 2025) — 607952517LinqAlpha.PDF
[4] Goodman - HC O-PF (Sifting through the noise; upgrade) — CLSA (7 Mar 2025) — 607952517LinqAlpha.PDF
[5] Goodman - O-PF (Surprise raising ahead of DC starts) — CLSA (19 Feb 2025) — 607951103LinqAlpha.PDF
[6] Goodman - HC O-PF (Looking for a signal) — CLSA (15 May 2025) — 607959575LinqAlpha.PDF
[7] Goodman - HC O-PF (Roadmap becoming clearer) — CLSA (28 May 2025) — 607960765LinqAlpha.PDF
[8] Goodman - HC O-PF (Roadmap becoming clearer) — CLSA (28 May 2025) — 607960765LinqAlpha.PDF
[9] Goodman - HC O-PF (Roadmap becoming clearer) — CLSA (28 May 2025) — 607960765LinqAlpha.PDF
[10] Goodman - HC O-PF (Looking for a signal) — CLSA (15 May 2025) — 607959575LinqAlpha.PDF
[11] Goodman - O-PF (Surprise raising ahead of DC starts) — CLSA (19 Feb 2025) — 607951103LinqAlpha.PDF

## Citations

- [1] **607960765LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960765LinqAlpha.PDF>
- [2] **607952517LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/03/607952517LinqAlpha.PDF>
- [3] **607952517LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/03/607952517LinqAlpha.PDF>
- [4] **607952517LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/03/607952517LinqAlpha.PDF>
- [5] **607951103LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607951103LinqAlpha.PDF>
- [6] **607959575LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607959575LinqAlpha.PDF>
- [7] **607960765LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960765LinqAlpha.PDF>
- [8] **607960765LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960765LinqAlpha.PDF>
- [9] **607960765LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960765LinqAlpha.PDF>
- [10] **607959575LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607959575LinqAlpha.PDF>
- [11] **607951103LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607951103LinqAlpha.PDF>

