It's been a marvellous month for the S&P/ASX 200 Index (ASX: XJO) and many ASX 200 shares so far this August. Over the month so far, the ASX 200 has crossed the 8,900 point threshold for the first time ever and hit several new all-time record highs in the process. We could say the same for Seek Ltd (ASX: SEK) shares.
This ASX 200 online classifieds stock has certainly had a month to remember. It was only on 12 August that Seek shares closed at $24.40 each. Today, those same shares are going for $28.68 at the time of writing. That's a good 17.6% higher than they were just over a week ago.
One of the catalysts for this hefty valuation jump was the earnings report that Seek delivered just yesterday.
As we covered then, this earnings report, covering the 2025 financial year, saw the company report $1.09 billion in revenues. That was an increase of 1% for the year. Although earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 2% to $459 million, the company's free cash flow rocketed 41% to $203 million.
That helped Seek to declare a final dividend of 22 cents per share, fully franked. That represents a 37.5% rise over last year's final dividend of 16 cents per share.
So investors clearly liked what Seek posted yesterday. But one expert thinks there's plenty more upside left in the tank when it comes to this ASX 200 classifieds stock.
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Expert gives this ASX 200 stock a buy rating
Analysts at Macquarie have just run the ruler over Seek's earnings report. And they liked what they saw.
Macquarie reckons the FY2026 guidance that Seek provided yesterday appears "conservative". Analysts pointed to "narrowing" volume declines in the Australian and New Zealand markets, and anticipate that the Australian market will benefit from interest rate cuts going forward.
Analysts were also encouraged by the big dividend jump, which "represents a payout ratio of around 100% of cash profit less capex". They went on to predict that "we see the payout remaining around these levels given improved free cash flow vs prior periods as Seek benefits from 1) ongoing operating leverage and 2) redemptions from the SEEK Growth Fund".
Overall, Macquarie maintained its outperform rating on Seek shares, giving the ASX 200 stock a 12-month share price target of $32.50. If realised, that would represent a potential upside of another 14.3% from where the shares sit today. Here is Macquarie's thesis in a nutshell:
Seek has started FY26 with a solid foundation, to beat, what we are calling conservative guidance (MQe = +4% vs NPAT mid-point) with upside to both ANZ yields (annualisation benefits) and possibly volumes. Asia returning to growth is also pleasing. Retain Outperform and expect ongoing re-rating.
Let's see if Macquarie's bullish view on Seek shares holds up going forward.
