Domain shares extend gains as Bell Potter upgrades to 'buy'
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The news: Domain shares extended gains from Thursday as Bell Potter upgraded its rating on the Nine-controlled real estate platform from 'hold' to 'buy'.
The numbers: Domain shares were up 5.3% to $3.08 at 3:15pm AEDT. They rose 7% in the previous session after the company announced that ex-REA Group CEO Greg Ellis had been appointed as interim CEO and reported a rise in first-half profit.
Bell Potter upgraded its rating on Domain and lifted its target price from $3.20 to $3.30.
The context: Analyst Michael Ardrey said Domain "appears to be repairing damage to audience and listings". The company may also be approaching the start of a potential consensus earnings upgrade cycle, he said.
However, Ardrey noted that support for listing performance near term, as well as full-year revenue growth, is predicated on a rate cut by the Reserve Bank at its February meeting.
Bell Potter downgraded its rating on Domain in November, noting potential uncertainty in the second half of the financial year, with rate cuts expected to come later in the period.
The source: Bell Potter research
