Morgans initiates coverage of Australia's GPT, sees earnings upside from pivot to fund manager

GPT

02/12/2025 03:18

** Morgans initiates coverage of Australia's GPT Group GPT.AX at A$6.20 per share

** Brokerage says co's strategy to transition to a higher-return funds management platform from balance-sheet ownership could help AUM increase from A$37 billion ($24.23 billion) to >A$85 bln, driving earnings growth of 5-7% per annum

** Adds, valuation supported by stabilising interest rates, persistent supply constraints, and current share price reflecting nominal value attributed to the funds management business, which co expects will generate A$91m in EBIT in CY25F, representing value vs peers

** Flags domestic interest rate outlook as price risk, and adds partial divestments run the risk of reducing average asset quality

** Stock up 1.2%, bringing YTD gains to 27.9%

($1 = 1.5267 Australian dollars)

 (Reporting by Shruti Agarwal in Bengaluru)

 ((Shruti.Agarwal@thomsonreuters.com))