The REA Group Limited (ASX: REA) share price stormed to a record high on Friday following the release of its first quarter update.
The online property listings company's shares jumped 8% to $180.67 before ending the period at $176.81.
This means the REA share price is now up just under 15% since the start of the year.
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Can the REA share price keep rising?
The good news is that one leading broker still sees value in the REA share price at the current level.
According to a note out of Goldman Sachs, its analysts have retained their buy rating and lifted their price target on the company's shares by 2% to $193.00.
Based on the current REA share price, this implies potential upside of 9.2% for investors over the next 12 months.
What did the broker say?
Goldman was pleased with REA's "strong" first quarter result. It notes that price increases and stronger than expected depth advertising uptake were highlights during the period.
In response, the broker has lifted its earnings estimates for the company and the target on the REA share price accordingly.
Goldman commented: "The strong REA result was driven by momentum in residential listings (+11%), the impact of July price rises (c.8%), and better than expected benefits from depth uptake and adjacent services (i.e. Audience maximiser). REA broke out full-year core operating cost guidance for high single digits (Excl. India/MOC), with domestic costs offsetting savings from PropertyGuru/99 Group changes, while it signaled a reduction in associate contributions due to Move reinvestment and recent acquisitions."
"Overall we revise higher our FY22 listing assumptions (+2% vs. -3% prior) but continue to expect declines in 2H22 (+7%/-3% in 1H/2H22 given the Fed election & tough comparable in 4Q21). Combined with higher yield growth & domestic opex assumptions, our FY22-24 core Australia EBITDA is +1% to +5%. When including the higher associate contributions our REA FY22-24 EPS +1% to +4% and our 12m SOTP-based TP increases +2% to A$193," the broker added.
