One of the qualities to look for in a defensive business is pricing power, and REA’s dominance in real-estate listings ensures it can raise prices regularly. When listing a house it’s almost a given that it will be posted on www.realestate.com.au in the first instance as part of a wider campaign. The stock has come under pressure as bond yields moved higher and concern around real-estate volumes intensified with the RBA poised to move from easy policy to tighter settings. With the stock down ~23% YTD, we think these fears are now overblown and view REA as an attractive, defensive stock now trading on the cheapest multiple since March 2020.
MM is now bullish REA below $130
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