FY19 results were below Credit Suisse estimates, primarily because of listings weakness in the Australian market. Asia was also affected by macro weakness and competitive pressures.
Financial services revenue was also lower because of tighter lending conditions and a subdued property market.
Credit Suisse concedes the near-term listings environment is now less relevant for REA Group but did expect more of a recovery in the second half, given significant declines since January and amid a more favourable environment for the property market.
Neutral maintained. Target is raised to $90.50 from $77.60.
Target price is $90.50.Current Price is $96.64. Difference: ($6.14) – (brackets indicate current price is over target). If REA meets the Credit Suisse target it will return approximately -7% (excluding dividends, fees and charges – negative figures indicate an expected loss).