UBS found the first half impressive, although believes the confirmation that growth is set to slow has probably driven underperformance in the share price. Moreover, this could suggest earnings risk in FY20.
Consensus appears to factor in around 12% revenue growth in FY20, which the broker suspects is at risk, as price increases could slow and depth comparables become more difficult from the second half, while developer tailwinds should eventually abate.
UBS remains qualitatively positive on the business but retains a Neutral rating on valuation. Target is steady at $75.
Target price is $75.00.Current Price is $74.00. Difference: $1.00 – (brackets indicate current price is over target). If REA meets the UBS target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).