Morgans reduces first half FY21 volume forecasts for Domain Holdings due to the extension of the Victorian lockdowns.
With in-person auctions prohibited until October 26 at the earliest, the broker believes the Melbourne market’s spring selling season will be severely impacted. Additionally, there is some slight weakness in national listings (ex Victoria).
However, the analyst expects the impact to some degree is the relative strength of the Sydney market in the past two months.
Morgans also assumes a large portion of ‘lost’ listings in Melbourne in the first half will come through in the second half, once Melbourne hopefully returns to covid normal.
The broker sees a strong rebound in the second half of FY21 and in FY22.
The Hold rating is unchanged and the target price is decreased to $3.32 from $3.37.
Sector: Software & Services.
Target price is $3.32.Current Price is $3.63. Difference: ($0.31) – (brackets indicate current price is over target). If DHG meets the Morgans target it will return approximately -9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
