Citi confident in near-term outlook for Australia's REA, Domain

Domain Holdings Australia

14/04/2023 24:10

** Citi says it is confident in near-term outlook for online
property classifieds operator REA  REA.AX  and online property
listing firm Domain  DHG.AX  despite hiring activity indicating
rise in costs 
    ** Brokerage says while online property listings continue to
be weak, March quarter listings were better than expectations 
    ** Stabilising house prices suggest that activity could
pick-up and represents minor upside to FY23 earnings forecasts
for cos-  Citi   
    ** Citi says industry feedback suggests stronger than
expected price increases from REA for FY24 that should help
offset any weakness in listings in FY24 
    ** However brokerage says Domain remains its preferred pick
as DHG's job listings in 3Q23 increased q-o-q
    ** Citi expect new online property listings in June quarter
to be down yoy but forecasts new online property listings to
return to growth in 2QFY24 
    ** Six of 12 analysts rate DHG "buy" or higher, five "hold"
and one "strong sell"; their median PT is A$3.51 – Refinitiv
data
    ** Seven of 14 analysts rate REA "buy" or higher, five
"hold" and two "sell" or lower; their median PT is A$130.0 –
Refinitiv data
    ** REA and DHG have risen 28.7% and 29.2% this year, as of
last close

 (Reporting by Nausheen Thusoo in Bengaluru)
 ((Nausheen.Thusoo@thomsonreuters.com;))