Intelligent Investor

REA price guide change

We're lifting our recommended Buy price for REA Group in light of further analysis of the property listings industry.
By · 2 Nov 2017
By ·
2 Nov 2017 · 1 min read
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Recommendation

REA Group Ltd - REA
Buy
below 60.00
Hold
up to 100.00
Sell
above 100.00
Buy Hold Sell Meter
HOLD at $72.93
Current price
$181.67 at 16:40 (23 April 2024)

Price at review
$72.93 at (02 November 2017)

Max Portfolio Weighting
6%

Business Risk
Medium-Low

Share Price Risk
Medium
All Prices are in AUD ($)

We recently reviewed Domain Holdings Australia, REA Group's soon-to-list competitor (see Domain's listing bonanza). In combination with that review, we also considered REA's business, growth expectations and recommendation price guide.

Having done so, we're lifting our recommended Buy price to $60. At that price, we would be comfortable buying REA Group on a forecast 2019 price-earnings ratio of 23. While REA Group is a better business than Domain, it has a somewhat weaker growth profile than Domain over the short to medium term. Our REA Group recommendation remains HOLD.

IMPORTANT: Intelligent Investor is published by InvestSMART Financial Services Pty Limited AFSL 226435 (Licensee). Information is general financial product advice. You should consider your own personal objectives, financial situation and needs before making any investment decision and review the Product Disclosure Statement. InvestSMART Funds Management Limited (RE) is the responsible entity of various managed investment schemes and is a related party of the Licensee. The RE may own, buy or sell the shares suggested in this article simultaneous with, or following the release of this article. Any such transaction could affect the price of the share. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.
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