Following a third quarter update, Morgans lowers its target price for REA Group to $145.40 from $156.30. As the amended target price is still more than 10% above the prevailing share price, the broker raises its rating to Add from Hold.
A mix of listings growth and contracted price rises resulted in a resilient performance for the core Australian residential business in the 3Q, in the broker’s opinion. Nonetheless, a volatile 4Q is expected on broader macroeconomic impacts and due to the Federal election.
Sector: Media.
Target price is $145.40.Current Price is $112.15. Difference: $33.25 – (brackets indicate current price is over target). If REA meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
