Assessing GPT Group (ASX:GPT) Valuation After Strong Half-Year Earnings Recovery and Share Price Rally

GPT Group (ASX:GPT) just released its half-year earnings, and there is a lot for investors to consider. The headline figure is clear enough, with revenue rising sharply and net income shifting from a loss last year to a solid profit. That kind of turnaround, along with stronger earnings per share, has energized the market and prompted questions about whether this real estate heavyweight is entering a new phase.

This is not simply a one-off increase. GPT Group’s share price has climbed nearly 25% this year, surpassing the broader sector, and the stock is up more than 17% over the past month. The momentum is notable, especially following a challenging period not too long ago. With both sales and profit significantly higher and last year's loss fading from memory, investors are now facing a very different risk profile compared to twelve months ago.

The question remains whether this marks the beginning of a sustained recovery that could make GPT appear attractively valued, or if the market has already priced in expectations for future growth. Let’s examine the numbers to get a clearer sense of where the value may lie.

Most Popular Narrative: 0.5% Undervalued

According to community narrative, GPT Group is viewed as slightly undervalued, with the consensus outlook pointing to near-term fair pricing but long-term upside potential. This assessment brings together analyst forecasts for earnings, revenue growth, and risk factors to estimate today’s fair value.

Forward population growth and ongoing urbanisation in Australia's key cities are likely to support continued strong demand for logistics and prime commercial assets. This would underpin high occupancy rates and rental income growth, ultimately benefiting GPT's recurring revenue and long-term earnings. Surging e-commerce and the associated need for last-mile logistics are driving robust leasing spreads (37% achieved in logistics deals) and maintaining exceptionally low vacancy (2.8%). These trends are expected to deliver continued above-average top-line revenue growth and improved net margins as rent-paying occupancy rises.

Behind this valuation, bold financial projections and sharply higher future margins are creating buzz. Is analyst optimism justified, or do the forecasts hide surprise twists? The real story fueling this price target is more than just headline growth. It is a blend of aggressive profitability and major market trends that investors can't afford to miss.

Result: Fair Value of $5.57 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, higher costs for office assets and ongoing exposure to the Australian market could challenge GPT Group’s prospects if macroeconomic headwinds intensify.

Find out about the key risks to this GPT Group narrative.

Another View: Market Ratio Method Tells a Cautionary Tale

Looking at valuation from a different angle, the market comparison using the price-to-earnings ratio points to GPT trading at a premium relative to the global sector average. This method suggests caution and raises doubts about the stock's current pricing. Is the market overly optimistic, or does growth justify the valuation? The answer may not be clear.

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out GPT Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own GPT Group Narrative

If you have a different perspective or want to dive deeper into the figures yourself, it's easy to shape your own analysis in just a few minutes. do it your way.

A great starting point for your GPT Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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