broker calls, page-18

RBS Australia 25/02/2010 3 Hold $0.60 2.6%

Target $0.60 (was $0.38). The interim result for the group was in line with the broker's expectation and it sees the second half as looking increasingly positive.

While the earnings mix should change over time as developments are again being considered but the broker wants to see evidence of proposed major investment partners before turning more positive, so its Hold rating is retained.

Macquarie 25/02/2010 3 Downgrade to Neutral from Outperform $0.64 9.4%

There was a difference between a statutory loss and an operational profit in the interim statement released by Goodman Group yesterday, but Macquarie analysts point out management reaffirmed its guidance for the full year. This should translate into earnings per share (positive, not loss) of 5.7c.

However, the analysts maintain there is a lot of uncertainty hanging over the trust's future and hence the decision has been taken to downgrade to Neutral.

BA-Merrill Lynch 25/02/2010 1 Buy, High Risk $0.70 19.7%

Goodman's result was in line with guidance and FY10 guidance was reaffirmed. However, given Goodman has made only a small inroad in the first half into its targeted $1bn of development for FY10, the broker sees the potential for up to 45% earnings upside from guidance in the period, or at the very least a lot of upside risk in FY11.

Goodman's balance sheet is in good shape and the stock is trading at a PE discount when the broker believes a premium is warranted. Buy retained.

UBS 25/02/2010 5 Sell $0.54 - 7.7%

The result was in line with expectations and previous guidance has been reaffirmed, UBS says.

However, upside is seen to development completion forecasts as UBS feels they are conservative.

UBS will review its earnings forecasts and valuation after a deeper look into the accounts.

Deutsche Bank 25/02/2010 1 Buy $0.70 19.7%

The broker notes the 1H result was in-line with expectations, with the company on track to hit FY10 guidance. The broker further expects higher development volumes to translate to EPS growth in FY11, despite the impact of additional equity.

Work in hand has doubled to $1.2bn from last June, which the broker thinks is solid proof of the group's ability to grow its development book. With balance sheet issues sorted, asset values bottoming, and citing evidence of a pick-up in investor appetite, the broker thinks this is one of the few A-REIT's capable of generating 10%+ per year EPS growth over the medium term. Buy maintained.