Top broker slaps buy rating on Trade Me Group Ltd shares

In afternoon trade the Trade Me Group Ltd (ASX: TME) share price has recovered some of its recent declines and is up almost 2% to $4.16.

This has reduced its year-to-date decline to 14%.

Why are its shares higher?

The New Zealand-based online marketplace provider’s shares were given a much needed boost this morning by a positive research note out of Citi.

According to the note, Citi has upgraded Trade Me’s shares to a buy rating from neutral and lifted its price target to $4.80.

This price target implies potential upside of over 15% for its shares based on the current share price.

Citi’s analysts believe that concerns over the impact Amazon and Facebook Marketplace will have on its business are unwarranted and that its sell-off has been largely unjustified.

The broker has also upgraded its earnings forecasts for Trade Me due to its belief that motor sales will continue to grow and property sale headwinds will ease.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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