REA Group shares (ASX: REA), traded on ASX under the ticker symbol REA got within 52c of a new 52 week highs in trading today at A$221.10 before ending up 0.5% at A$219. With gains of 40% for REA’s share price over the past 12 months, bulls will be pleased to see analyst coverage from Morgan Stanley, which reinstated the company with an “Overweight” rating and a price target of A$250.

Morgan Stanley’s confidence in REA Group is based on the company’s continued ability to deliver double-digit annual increases in pricing and earnings. The investment bank’s analysts believe the compounded benefit of this dynamic is currently “undervalued” by investors. Despite the breadth and diversity of the industry in which REA Group operates, the company stands out for its unique approach to pricing and earnings power.

 

Richmond, Australia-based REA Group Limited is a company specialising in online property listings, offering services in Australia, India, the United States, Malaysia, Singapore, Thailand, Vietnam and other international markets. The company operates various residential, commercial and share property websites.

In addition, REA Group Limited is active in the provision of mortgage broking and home ownership finance solutions, property data services and technology solutions to the property market. The company, a subsidiary of News Corporation, was founded in 1995 and has been operating under its current name since December 2008.

 

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REA Group currently has a market capitalization of $28.93 billion, with a 52-week range of $140.50 to $221.69 .

Morgan Stanley’s revised price target for REA Group reflects strong confidence in the company’s growth potential, underpinned by its ability to deliver double-digit annual price and earnings growth, something the analysts believe has been underestimated. With an Overweight rating, REA Group is considered well positioned for continued positive performance in the coming quarters.