REA: Recent Pullback Will Set Stage For EPS Outperformance-Driven Rebound

Analysts have nudged their price target for REA Group slightly higher to A$270.00, citing expectations for steadier long term growth, earnings forecasts that are modestly above consensus, and a belief that recent share price underperformance and regulatory concerns are overdone.

Analyst Commentary

Bullish analysts highlight that the recent pullback in REA Group shares has created a more attractive entry point relative to their growth outlook and earnings power. They argue that current valuation multiples do not fully reflect the company’s ability to deliver above consensus earnings in the medium term.

While near term regulatory and competitive headlines have weighed on sentiment, analysts suggest these risks are being priced in too aggressively relative to their likely financial impact, leading to a disconnect between fundamentals and the share price.

Bullish Takeaways

• Bullish analysts point to earnings per share forecasts that sit modestly above market consensus over FY26 and FY27, supporting the raised price target and implying further upside if execution is delivered as expected.
• They see recent share price underperformance as inconsistent with the company’s underlying operating momentum, creating potential for a re rating as investor focus returns to core growth drivers.
• Concerns around competitive pressure and regulatory scrutiny are viewed as overdone, with analysts arguing that REA Group retains strong market positioning and pricing power that should underpin long term margin resilience.
• The A$270 target price is framed as achievable under a scenario of steady volume recovery and disciplined cost control, with scope for additional upside if macro conditions or product monetisation trends prove better than currently modelled.

What's in the News

• Chief Financial Officer Janelle Hopkins will retire from REA Group on 11 February 2026 after more than seven years in the role, transitioning to a non executive career while remaining available to support the handover (company announcement).
• Andrew Cramer, currently Deputy CFO at News Corp in New York, has been appointed REA Group CFO effective 12 February 2026, bringing global experience in commercial finance, corporate development, treasury, and digital real estate investments (company announcement).
• Cramer previously advised REA Group during his decade-long investment banking career at Macquarie and Citi, where he led Citi's Technology, Media and Telecommunications coverage in Australia and New Zealand, giving him deep familiarity with REA's strategy and sector dynamics (company announcement).

Valuation Changes

• Fair Value: unchanged at A$243.58 per share, indicating no revision to the intrinsic value estimate.
• Discount Rate: has fallen slightly from 7.83% to 7.82%, reflecting a marginally lower required return assumption.
• Revenue Growth: has risen fractionally from 5.90% to 5.91%, signalling a very small uplift in long term top line expectations.
• Net Profit Margin: has edged down marginally from 39.08% to 39.08%, implying a near flat long term profitability outlook.
• Future P/E: has eased slightly from 45.45x to 45.43x, pointing to a virtually unchanged valuation multiple applied to future earnings.