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Credit Suisse Sees Weaker Margins Pushing Estimates Lower For Realogy

In a report published Thursday, Credit Suisse analyst Michael Dahl reiterated an Underperform rating and $37.00 price target on Realogy Holdings Corp. (NYSE: RLGY).

In the report, Credit Suisse noted, "We now expect '15 adj. EBITDA of $797 mln (from $811 mln), with a margin of 14.2% (from 14.5%), owing to the incremental discussion on cost inflation expected. This is consistent with guidance of 13.9%-14.2% margins assuming 6-8% transaction volume growth (we est. +7%). Mgmt. gave no updates on the current demand environment, leading us to maintain our '15 transaction volume ests. of +7% y/y (+6% for NRT and +7.5% for RFG, with NRT having a much larger impact on EBITDA), with sides +5% y/y and price +2%. Mgmt. continued to stress debt reduction as its top priority, with returning cash still currently restricted and even upon retiring restrictive debt, the company is targeting net debt/EBITDA of 3x before returning cash. We continue to model this as a 4Q'16 event, at the earliest."

Realogy closed on Wednesday at $45.15.

Latest Ratings for RLGY

Dec 2014

Citigroup

Downgrades

Buy

Neutral

Nov 2014

Citigroup

Maintains

Buy

Oct 2014

Barclays

Maintains

Overweight

View More Analyst Ratings for RLGY
View the Latest Analyst Ratings

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