© Reuters. Evercore ISI upgrades Zillow (ZG) on housing market recovery, sees 45% upside potential
By Senad Karaahmetovic
Evercore ISI analysts upgraded Zillow Group (NASDAQ:) to Outperform from In Line with the price target raised to $61 per share from the prior $34.
The new price target implies an upside potential of about 45% relative to Friday’s closing price. Analysts shared 5 key reasons behind today’s upgrade.
- Q1:23 the trough quarter for residential real estate in terms of EHS (existing homes being sales) and home prices, see tentative signs of a rapid recovery;
- Anticipate top-line trends for ZG starting to positively inflect in Q2:23;
- Believe Zillow should fully participate in the real estate market recovery;
- Investments and initiatives could potentially set up Zillow for stronger growth and profitability in a post-recovery market; and
- Even with the ~40% run-up in ZG shares YTD, still believe there is reasonable valuation upside from current levels.
Analysts added that today’s upgrade is also a macro call as the housing market is “either already beginning to recover or will very soon do that.”
Zillow shares are up about 5% in pre-open Monday.
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