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What are MM’s thoughts on REA?

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Question asked

What are MM’s thoughts on REA?

Thoughts on REA please.

Answer

Hi Colin,

We believe REA is top quality operator who delivered a solid result earlier in the month, they grew earnings by +22% in first half  aided by strong listing volumes in Sydney & Melbourne. However the stock initially dipped on the release with cost guidance coming in higher than expected which is likely to weigh on the 2H earnings.

As has been the case with most quality ASX names there was little to no follow through selling and the stock is still trading within striking distance of its all-time high.

  • We like REA into pullbacks, but the risk/reward and valuation is not exciting in the $185-190 region.
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REA Group Ltd (REA)
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