CAR Group Ltd (ASX: CAR) and REA Group Ltd (ASX: REA) shares have both stayed relatively flat in 2025.
These companies are two of the largest in the communications sector by market cap.
For context, the S&P/ASX 200 Communication (ASX: XTJ) sector is up more than 14% in that same period.
According to Bell Potter, both options have upside.
The broker has optimistic price targets on both these holdings.
CAR Group Ltd (ASX: CAR)
CAR Group provides digital and technology solutions designed for buying and selling vehicles.
It's the company behind familiar online marketplace businesses in Australia: carsales.com
Its share price has risen 1.53% so far this year, with shares closing at $37.05 each on Monday.
Bell Potter sees upside in this company with an "overweight" rating and a price target of $40.15.
This indicates an upside of 8.37%.
The broker noted the company's diverse geographical portfolio has it well positioned.
Diversified across regions and vehicle types allow diversification across different cycles. Strong US growth story, can duplicate business model in other regions.
Elsewhere, Trading View has a 12 month price target of $40.45 and online brokerage platform Selfwealth has an average price target of $40.38.
REA Group Ltd (ASX: REA)
REA Group operates Australia's leading residential and commercial property websites –realestate.com.au and realcommercial.com.au – along with Flatmates.com.au, a website that focuses on shared property.
It has risen 1.89% so far this year.
Bell Potter sees upside for its share price, particularly in the long term.
In a report released from the broker last week, they noted market dominance as a key catalyst for long term growth.
REA's market dominance allows it to implement consistent price increases, and drive the adoption of new, premium product offerings. EBITDA margins are forecasted to reach over 60% in the next two years, and revenue is projected to grow at CAGR of 14% until 2027, after increasing 20% YoY in the FY25 half yearly result.
The broker also said a rate cutting cycle could lower borrowing costs and is historically a catalyst for increased activity in the real estate segment, and REA stands to benefit directly through an uptick in listings.
The broker currently has a price target of $262.00, which indicates a 9.36% upside.
Both Selfwealth and Trading View believe REA Group shares undervalued by approximately 8%.
