REA Group (ASX: REA) shares have bounced around quite significantly in 2025.
The online real estate advertising company has seen its share price hit as high as $275.00 back in April, but now sit close to a 52 week low at roughly $216.59.
The general consensus is that this quality blue-chip stock is undervalued. Bell Potter seems to agree – with a buy recommendation on REA group shares.
But in a report issued yesterday by the broker, it has significantly lowered its price target.
Let's see what the broker had to say.
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Listings and outlook
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
The broker highlighted a reported 8% decline in national new listings for Q1, which consisted of large
swings in listings declines through July-September. However conditions are expected to ease aided by a potential RBA rate cut.
Bell Potter forecasts a 6% decline in listings in 1H FY26 followed by a rebound of 5% in 2H FY26, resulting in a flat full year outcome.
The broker also noted the traction gained by CoStar Group (competitor) since acquiring Domain.
Despite the progress however, REA retains a dominant market position.
REA commands a significant audience moat which CSGP will find difficult to displace in our view; REA's residential platform attracted 50.2m monthly visitors in September, 3.1x more than Domain's 16.1m; 2.6x more web visitors to its commercial real estate platform; and 2.3x monthly active users on iOS applications.
Bell Potter said these audience metrics underpin REA's network effect and effectively represents the product it sells to vendors; more eyes should equate to greater competition in the bidding process and achieve an uplift on sale price, relative to listing costs.
Price target reduction for REA Group shares
Overall, it seems Bell Potter believes REA faces short-term listing declines but should benefit from potential rate cuts in the future. Competitive threats from CoStar are rising but remain limited given REA's entrenched market dominance.
Based on this analysis, Bell Potter has reduced its target price on REA Group shares to $256.00 (previously $284.00).
From today's share price of approximately $216.59, this indicates a significant upside of 18.19%.
