REA – Algo Update

Our Algo Engine generated a buy signal in REA last week at $80.50.

Since then the stock has rallied almost $5.00, following a solid FY18 earnings result which met consensus forecasts.

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Revenues were reported at  $808m, EBITDA $464m and NPAT from core operations $280m.

In FY19,  the market is looking for 15% revenue growth, flowing through to similar underlying earnings growth. This places REA on an FY19 forecast yield of 1.8%.

Despite, risks in soft listings and developer pipeline, we recommend maintaining long exposure to REA and applying a stop-loss below the recent $80.50 low.

REA

 

Author: Leon Hinde

Leon has been working in the financial services industry for 18 years in management and advisory roles. Leon has extensive experience in general advice and dealings involving securities and derivative financial products.

PS 146 Securities & Derivatives, ADA 1 & 2 accreditation, Responsible Manager Certificate. Leon is authorised to provide financial product advice and deal with respect to the following financial products:

· Deposit Products
· Securities
· Derivatives
· Interest in managed investment schemes; and
· Government debentures, bonds and stocks