Risk Reward Update

研报英文原文证据摘录

Risk Reward Update

UpdateM

RiskRisk RewardReward– REA Group- REALimitedGroup(REA.AX)Limited (REA.AX)

Structural growth story - able to successfully navigate AI risks + opportunities

PRICE TARGET A$220.00 OVERWEIGHT THESIS

Our PT is A$220/share, the approximate midpoint of fundamental valuation range of A$200 ▪Key strengths: Ongoing structural growth

to A$232/share using three methodologies - DCF, P/E and SOTP. of digital real estate advertising / marketing

budgets.

P/E value A$200/share: FY27E EPS of A$5.49 and target multiple of 35x applied (premium ▪REA's dominant audience position in its

to ASX due to higher EPS CAGR). key Australian market.

SOTP value A$232/share: Target 25x FY27E EBITDA for core business + investments in ▪Sustainable high profit margins and asset

Move. returns.

DCF value A$203/share: 8.3% WACC, 3% TGR. ▪Optionality of additional growth likely via

A$193.76 new product extensions for core AU

business + expansion into ancillary markets,Consensus Price Target Distribution A$137.00 A$249.00

MS PT new geographies (India).

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates ▪Key risks include the impact of a softer

macro backdrop (rates/economic growth) on

AU real estate transaction volumes. Lower

listings and lower growth may also prompt

RISK REWARD CHART a de-rating of the shares.

▪AI/Agentic AI/substitute products are

AUD A$270.00A$270.00(+68.00%)A$270.00(+68.00%)(+68.00%) another key risk, which could disrupt REA

and weigh on the attractive returns REA is

currently generating.

A$220.00A$220.00(+36.89%)A$220.00(+36.89%)(+36.89%)

Consensus Rating Distribution

180 57% Overweight

A$160.71A$160.71A$160.71

36% Equal-weight

120 7% Underweight

MS Rating

Source: Refinitiv, Morgan Stanley Research