ASX 200 share REA Group Ltd (ASX: REA) has been a strong performer in 2024, up more than 11%.
The real estate stock has outpaced the broader market so far this year. The benchmark S&P/ASX 200 index (ASX: XJO) has increased 7%.
Brokers are focused on the ASX 200 share, particularly as the company explores ambitious growth opportunities.
This includes its recent moves for a potential takeover of United Kingdom-based property listings company Rightmove (LSE: RMV) and growth in the Australian, United States and Asian markets.
Here's why experts say it could soar in the next bull market.
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ASX 200 share poised for growth
Goldman Sachs is bullish on REA Group, reiterating its buy rating in a note to clients last week.
The broker says REA has one of the "best risk/reward profiles" in the domestic media space. It mentions the company's "significant disparity" in revenue share of leads and the "still fragmented" end market.
In particular, we are positive on the pricing power of the real estate classified vertical, given that we believe budgets will rise (at the expense of commissions), and within existing budgets, REA, as a leading player in the vertical, under-monetises its lead generation.
We also see the current negative sentiment around AU property as more a driver of share prices over earnings.
We believe REA is among the highest-quality names in our coverage, given it has the highest ability to continue to drive pricing… We are therefore buy-rated on REA.
Goldman forecasts revenue of $1.6 billion in FY25 for the company, stretching up to $1.79 billion the year after. Earnings per share (EPS) could grow by 12% this year and more than 18% in FY26 if the broker's estimates are correct.
It values the ASX 200 share at a price target of $221 apiece, indicating around 10% upside potential at the time of writing. It also forecasts an average 1.1% dividend yield for the next 12 months, bringing the total implied return to 11%.
Offer rejected – but bullish ratings remain
REA Group's footprint is in the property listing space here in Australia. But the ASX 200 share is looking global. It made an offer to buy UK-listed company Rightmove earlier this month.
The deal was non-binding and included a mix of cash and stock, valuing the UK company at 5.6 billion Great British pounds. This was a 27% premium to Rightmove's share price on August 30. However, Rightmove's board rejected the initial offer.
Bell Potter recently retained its buy rating on the ASX 200 share, setting an improved price target of $226.
The firm liked the prospects of a deal, saying it could result in a 12% EPS growth by FY26.
While the numbers are great, they won't apply for now, given Rightmove's rejection of the initial offer.
Macquarie analysts were also optimistic about this possible takeover. But even without the deal, it rates the ASX 200 share a buy with an increased price target of $229.
One interesting but unrelated takeaway from REA's offer is that it also intends to apply for a secondary listing on the London Stock Exchange (LSE).
According to Goldman Sachs, this gives the "opportunity for a wider array of investors to gain exposure to REA…".
Foolish takeaway
REA Group could be a standout ASX 200 share in the next bull market. Especially if the Rightmove acquisition comes to fruition – although there is no guarantee anything will happen there.
For now, brokers are just as bullish on this company's current operations. The stock is up 27% in the past year.
