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Bull Of The Day: Realogy (RLGY)

Brian Bolan

Realogy (RLGY) is a Zacks Rank #1 (Strong Buy) and is going to be reporting next week.  The stock is a little lower today, but here is the rub, the Federal Reserve just cut interest rates again and that means consumers have more spending power ... at least they do when it comes to buying a new home.

Lower rates mean lower payments and that means more people can afford new or better homes.  RLGY is positioned to benefit from this as they own a host of brands that serve the real estate market.  Coldwell Banker and Century 21 are two of the more recognizable brands in the mix.

Right now, RLGY is a Zacks Rank #1 (Strong Buy) and let's explore why that is in this Bull of the Day article.

Description

Realogy Holdings Corp. is a provider of real estate services. The Company through its subsidiaries provides real estate brokerage services, relocation services, and title and settlement services. The Company's brands and business units include Better Homes and Gardens(R) Real Estate, CENTURY 21(R), Coldwell Banker(R), Coldwell Banker Commercial(R), The Corcoran Group(R), ERA(R), Sotheby's International Realty(R), NRT LLC, Cartus and Title Resource Group. Realogy Holdings Corp. is headquartered in Parsippany, New Jersey.

Recent Earnings

RLGY has a subpar earnings history.  This is clearly not the reason the stock is a Zacks Rank #1 (Strong Buy).  It has met the Zacks Consensus Estimate in each of the last two reports, but prior to that it missed two times as well.  We have seen much better in terms of beating the number.

Earnings Estimate

The Zacks Rank care most about the movement in earnings estimates and RLGY has a lot of positive earnings estimate momentum.

I see increases for this quarter, next quarter, this year and next year.  

The Zacks Rank focuses more on the full year, so over the last 60 day the number for 2019 moving from $1.04 to $1.08 is what we want to see.  The 2020 number has moved from $1.20 to $1.29 over the same time horizon.

Valuation

Value players will love this stock as it trades at just under 8x forward earnings and a price to book of 0.43x.  Growth is slowing for RLGY, but the stock looks to have bottomed and is bracing for home buying and selling demand to increase with the lower rates.

Chart

Realogy Holdings Corp. Price and Consensus

Realogy Holdings Corp. Price and Consensus

Realogy Holdings Corp. price-consensus-chart | Realogy Holdings Corp. Quote

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