HOUS: Pending Compass Merger Will Face Antitrust Hurdles And Execution Uncertainty

Analysts have significantly raised their price target for Anywhere Real Estate from $8.83 to $11.67 per share. They cite the pending Compass acquisition, improved deal rationale, and expectations for a strengthened industry position, despite lingering regulatory and debt concerns.

Analyst Commentary

Recent research updates reflect a shift in analyst sentiment toward Anywhere Real Estate following news of its pending acquisition by Compass. The revised outlooks highlight both the potential rewards and risks as the company pursues this transformative deal.

• Bullish analysts believe the merger will create an industry leader with significant scale, totaling a combined 320,000 agents and a 15% share of national transaction sides.
• Upward price targets, some more than triple previous estimates, reflect expectations that the deal unlocks substantial cost synergies estimated at $225 million, or approximately 8% of combined operating expenses, and diversifies revenue streams.
• The transaction is seen as beneficial to Anywhere Real Estate shareholders, positioning the company for stronger pro forma revenue growth, projected at $12.8 billion in 2025.
• Adjusted valuation multiples, such as an enterprise value near 10 times consensus 2026 EBITDA, imply confidence in the new entity’s profitability and execution prospects.

• Bearish analysts caution that antitrust scrutiny and regulatory review pose meaningful risks that could complicate or delay the transaction.
• The company’s high debt load remains a concern. Even as projections show leverage declining, net debt-to-EBITDA is initially elevated at 4.4 times before an anticipated reduction to 1.5 times by 2028.
• There is a risk that anticipated synergies and growth may not fully materialize if execution challenges arise post-merger.

What's in the News

• FINRA has opened a probe into trading activity ahead of Anywhere Real Estate’s failed takeover bid for Douglas Elliman, seeking information on who was aware of the offer prior to its public disclosure in late May (Reuters).
• Compass, Inc. has entered a definitive agreement to acquire Anywhere Real Estate in a $1.7 billion deal. Each Anywhere share will be exchanged for 1.436 Compass Class A shares, valuing Anywhere at $13.01 per share (Key Developments).
• The combined company will be led by Compass CEO Robert Reffkin and is expected to have an enterprise value of approximately $10 billion, including debt (Key Developments).
• The transaction has been unanimously approved by both companies’ Boards and is anticipated to close in the second half of 2026, pending shareholder and regulatory approvals (Key Developments).
• If either party terminates the agreement, a $200 million termination fee will be payable (Key Developments).

Valuation Changes

• Consensus Analyst Price Target has increased from $8.83 to $11.67 per share, reflecting a substantial upward revision.
• Discount Rate has risen slightly from 12.32% to 12.5%.
• Revenue Growth projections have declined moderately, decreasing from 8.22% to 7.90%.
• Net Profit Margin projections have fallen significantly from 1.44% to 0.52%.
• Future P/E Ratio has increased markedly from 13.28x to 49.17x, indicating higher expected valuation relative to earnings.