“It was a broadly in line the financial year 2024 result for REA, in our view,” Raymond said. “Operationally, the group is performing well, highlighted by strong performances across the majority of its business segments.
“The Australia residential (+24% on the previous corresponding period or pcp) and REA India (+31% on pcp) revenue growth were two key highlights of note.
“Looking forward on costs, REA expects group operating cost growth in the “high single digits” (MorgE approx. +9%), while still targeting positive operating jaws.
“Group earnings before interest, tax, depreciation and amortisation (EBITDA) estimates across financial year 2025–financial year 2027 are increased by approx. 1-3% (REA India and Media revenue uplift), with adjustments to net profit after tax (NPAT) largely related to increased depreciation and amortisation (D&A) assumptions.
“Our discounted cash flow (DCF)-derived price target rises to A$197 (from A$178) on the above changes and increased medium-term margin growth assumptions.
“We maintain our HOLD, with a BUY below $197,” Raymond said.
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