Macquarie expects Domain Holdings Australia to report solid listing growth within first half results. Web tracking suggests continued market strength has driven 9% volume growth in the half in an already record listing volume calendar year.
Looking past the first half, the broker highlights an expected decline in building commencements likely suggests a similar deceleration of media ad revenue over the coming years which presents downside risk to earnings per share forecasts.
The broker looks to commentary on sustainable growth strategy for improved confidence. Earnings per share forecasts decrease -7%, -10%, -10% and -11% through to FY25.
The Neutral rating is retained and the target price increases to $4.90 from $4.80.
Sector: Software & Services.
Target price is $4.90.Current Price is $4.80. Difference: $0.10 – (brackets indicate current price is over target). If DHG meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).