Goodman share price crumbles 5% amid Wall St woes

The Goodman Group (ASX: GMG) share price is coming under fire today as the S&P/ASX 200 Index (ASX: XJO) trudges through a session to forget.

At the time of writing, the Goodman share price has retreated 5.1% to $18.68. It’s underperforming the ASX 200 index, which has slipped 2.5% to 6,834.

Why is the Goodman share price falling today?

More broadly, the ASX 200 is reeling after United States shares were sold off heavily overnight. 

A higher-than-expected inflation print has sparked fears that the Federal Reserve will dial up its interest rate hikes in a bid to stamp out soaring inflation.

With no news or announcements out of the company today, Goodman shares appear to be caught up in the wider market malaise.

Interestingly, real estate investment trusts (REITs) are often thought to provide investors with a level of protection through inflationary periods. 

The thinking goes that rental prices and property values tend to increase as prices do, supporting the dividends that these REITs pay out to shareholders.

However, this rhetoric hasn’t stopped the Goodman share price from underperforming the market today (or this year, for that matter). 

The S&P/ASX 200 A-REIT Index (ASX: XPJ) isn’t faring too well either. It’s printing a 3.9% fall at the time of writing.

Is this an opportunity to buy the dip?

Analysts at Goldman Sachs may think so. 

On the back of Goodman’s FY22 results, the broker retained its buy rating on Goodman shares, with a 12-month price target of $25.40.

Based on the current Goodman share price of $18.68, this implies potential upside of 36% over the next 12 months.

The broker believes Goodman will outperform its guidance in FY23, noting:

GMG continues to demonstrate its strong platform and positioning as evident in today’s result, supported by our expectation of a strong outlook for the Industrial sector more broadly, with a number of favourable fundamentals underpinning future long-term demand for industrial space. We expect solid rental growth as demand for high quality logistics space continues to outpace available supply.

Analysts at Citi are also bullish. The broker currently has a buy rating and a price target of $23.50 on Goodman shares. This represents potential upside of 26% from current levels.

Goodman share price snapshot

Against a backdrop of rising interest rates, Goodman shares have tumbled 30% so far this year.

The ASX 200 REIT is expecting to declare annual dividends of 30 cents per share in FY23. This puts Goodman shares on a forward dividend yield of 1.6%.

The post Goodman share price crumbles 5% amid Wall St woes appeared first on The Motley Fool Australia.

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Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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