It has been a rough 12 months for Seek Ltd (ASX: SEK) and REA Group Ltd (ASX: REA) shares.
These well known online classifieds companies provide customers with property and job listings.
REA Group shares are down 38% in the last year, while Seek shares are down 44%.
However AI takeover fears and competition threats have soured sentiment in recent times.
Despite these headwinds, both have received some positive views from brokers after being heavily sold off.
New analysis from Bell Potter sees plenty of upside for one of these stocks, while the other could be in very real danger of falling further.
Here is the updated view from the broker.
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Why REA shares are a sell
A new report from the team at Bell Potter has reiterated its sell rating on the ASX 200 stock.
There are four key reasons the broker expects further share price declines in the next 12 months:
- Elevated near-term RBA cash rate forecast expected to soften demand for lending
- Recent budget measures adversely impacting property investment as an asset class, particularly in the investor book, partially offset by owner-occupied
- Both factors combined expected to negatively impact average national dwelling values and listing volumes, more than offsetting Buy yield for REA
- REA's history of EPS declines in a falling 12-month average dwelling price environment raises further concern.
The broker also reduced its price target on REA shares to $133 (previously $137).
From yesterday's closing price, this indicates a downside of 8%.
REA published a Property Outlook Report (available on rea-group.com.au) outlining an internal expectation for largely flat prices YoY in CY2026 across combined capital cities, before rebounding to 5.5% growth in CY2027.
A flat print for CY2026 implies a weak 2HCY2026 with YoY combined capital cities growth currently 6.4% as at May.
Why Seek shares are a buy
In good news for investors, the broker is more optimistic about Seek shares.
Bell Potter retained its buy recommendation on Seek shares along with a price target of $18.60.
This target indicates 39% upside from current levels.
The broker did note the number of job listings on Seek's Australian platform is declining at a faster rate, and Seek is underperforming compared to competitors.
However, people are still actively applying for jobs, suggesting underlying demand for work remains healthy.
Bell Potter expects Seek to bounce back when interest rates fall, as it has done in previous economic recoveries.
