REA Group shares up after strong September quarter
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More news: Shares in REA Group are up more than 1% at $253.50 after the real estate listings platform reported a solid lift in first quarter earnings and revenue, helped by listings growth and price increases.
E&P Capital’s analyst Entcho Raykovski said the result was strong, but did not contain any significant surprises. E&P has a 'neutral' rating on the stock with a price target of $204.70.
UBS analyst Lucy Huang said REA's result was a slight miss on top-line due to softer than expected yield growth in residential revenue. UBS has a 'buy' rating on the stock with a price target of $263.
What they said: "We remain positive on REA's ability to grow underlying yield but remain watchful around potential impacts of geo mix drag into 2H25e," Huang said.
Raykovski said: "1Q25 results were slightly below our estimates at the EBITDA level but we note this is due to higher operating expenses, with full year cost guidance unchanged. In its outlook comments, the company has indicated that (1) October new listings were up 14% y/y and (2) group opex in FY25 is expected to be up in the high single digits".
"The company has also now explicitly guided to double-digit buy yield growth for FY25," he said.
REA Group Q1 boosted by price increases and new listings
The news: Real estate listings platform REA Group has reported a solid lift in first quarter earnings and revenue on the back of price increases and listings growth.
The numbers: Revenue for the three months to 30 September rose 21% to $413 million, while earnings increased 23% to $236 million.
National property listings were up 7%, with those in the key Sydney and Melbourne markets rose 11% and 9% respectively.
The context: REA said operating expenses for the quarter jumped 19% to $170 million, which included $18 million spent on legal and other adviser costs as part of the failed takeover bid for UK’s Rightmove.
The group delivered double-digit yield growth in its core Australian market, helped by listing growth in residential and commercial segments as well as price increases for its offerings in both segments.
What they said: “As we move into FY25 its clear that the Australian property market is in good health reflecting the expectations of future interest rate cuts together with high employment and population growth,” group chief executive Owen Wilson said.
The source: ASX announcement
