UBS sees double-digit yield growth outlook for Australia's REA, Domain Holdings

Domain Holdings Australia

06/10/2022 24:48

** UBS expects REA Group Ltd  REA.AX  and Domain Holdings
Australia Ltd  DHG.AX  to deliver double-digit yield  growth in
their residential listings businesses over the medium  term,
despite likely softening conditions in the Australian housing
market 
    ** Brokerage reiterates "neutral" rating for REA with PT of 
A$135.10 per share and "buy" on DHG with PT of A$4.00 per share
    ** UBS expects yield growth to be resilient despite a likely
weaker listings cycle, and forecast 10% yield uplift at REA, 13%
at DHG, driven by both price increases and depth uptake
    ** We are now more conservative on overall listing activity
for longer term, given lack  of churn catalysts like stamp duty
reform and ongoing uncertainty on the housing outlook for
consumers - UBS
    ** Five of 13 analysts rate DHG "buy", seven "hold" and one
"sell"; their median PT is A$4.03 – Refinitiv data
    ** Eight of 15 analysts rate the REA  "buy" or higher , five
 "hold" and two "sell" or lower ; their median PT is A$140.30 –
Refinitiv data
    ** REA down 22.7% while DHG lost 36.6% YTD, as of last close
 (Reporting by Nausheen Thusoo)
 ((Nausheen.Thusoo@thomsonreuters.com;))