UBS maintains its Buy rating for Domain Holdings after interim earnings (EBITDA) came in 7.5% ahead of expectations. It’s felt the market overly focused upon a -$3m increase in cost guidance to the exclusion of the strong revenue outlook.
The company has achieved a higher depth penetration (i.e. the % of upgraded ads) and an improved depth mix, despite putting through a 10% price increase, explains the analyst.
The broker highlights a 1H 19% jump in controllable yield (10% price increases and 9% depth), and a strong listing environment is evident from the first six weeks of the 2H. The target price is lowered to $5.50 from $5.60.
Sector: Software & Services.
Target price is $5.50.Current Price is $4.01. Difference: $1.49 – (brackets indicate current price is over target). If DHG meets the UBS target it will return approximately 27% (excluding dividends, fees and charges – negative figures indicate an expected loss).
