REA Group shares rise on JP Morgan upgrade
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The news: REA Group shares edged higher on the ASX after JP Morgan upgraded the real estate platform ahead of its first-quarter report and trading update.
The numbers: REA shares were up 0.6% to $229.18 by 12:45pm AEDT as the wider market fell 1.33%.
JP Morgan upgraded REA to from 'neutral' to 'overweight' and hiked its price target from $190 to $240.
The context: JP Morgan analysts said they see News Corp-owned REA "continuing to distance itself" from Nine-controlled ASX rival Domain, and generate "solid" yield growth compared to its competitors.
They noted that REA's "luxe" product is performing well as Domain shifts towards lower-value tiers. The analysts also said that while REA's valuation "appears full", they view it has more reasonable once earnings growth is taken into account.
The source: JP Morgan research
