Goodman Group’s 2023 earnings per share growth forecast looks “conservative” and “rather achievable” at just 11 per cent, according to Morgan Stanley.

The broker said the warehouse giant is taking a prudent approach, relying on “minimal” asset revaluation, and “negligible” improvement on the development side of the business.

Analyst Simon Chan pointed to the structure of Goodman’s incentive scheme, which allows for 100 per cent vesting of the long-term component at 11 per cent four-year compound annual growth in earnings per share, being roughly $1.234 a share in 2025-26.

Consensus is presently for $1.093 a share, and the broker $1.055 a share.

“This suggests what the board sees as a possible earnings trajectory is above the market’s expectations.”

Morgan Stanley has an overweight rating on Goodman shares and a $24.10 price target.

The broker forecasts 2022-23 earnings per share of 93.4¢, for growth of 14.9 per cent, exceeding the guidance of 11 per cent (equivalent to 90.2¢) on account of Morgan Stanley being “marginally more bullish on our development assumptions”. Its dividend per share forecast is 30¢.

Already, $430 million of development profits have been earned, sitting presently on the balance sheet due for recognition this year. Goodman shares rose 1 per cent on Wednesday to $20.76.