REA Group Ltd (ASX: REA) shares have been hotly covered over the past year.
It is an online real estate advertising company that provides property and property-related services on websites and mobile apps across Australia, Asia, and North America.
Threats of AI, elevated property prices, and changing consumer behaviour have all raised questions about the company's long-term growth prospects.
In the last 12 months, REA Group shares have experienced volatility and ultimately remain down 30% in that span.
Valuations from experts have fluctuated over this period, as the company's strong market position and exposure to Australia's property market continue to attract investor attention.
However, a new report from Bell Potter has suggested there may be better opportunities elsewhere for investors.
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Sell recommendation for REA Group shares
In Thursday's report, the team at Bell Potter reiterated its sell recommendation.
The broker said ongoing low clearance rates and lengthening days on market for properties suggest an ongoing mismatch in price expectations between buyers and sellers.
Additionally, further declines in house prices are expected over the coming months.
Days on market has increased by 8 days versus this time last year, while national auction data from SQM suggests that cumulative auctions are down -24% for the FY-to-date versus the comparable period last year; the cumulative number of houses sold via auction is significantly worse at -50% YoY.
Little to no upside over the next 12 months
Along with the sell rating, Bell Potter has a price target of $148 on REA Group shares.
From current levels, this indicates a downside of 7%.
We retain our Sell recommendation. Despite REA's ability to generate strong results in challenged operating environments, we continue to see significant downside risk to listings volumes/earnings vs. company guidance and consensus and await further data points via lending volumes and market listings before re-considering our thesis.
What are other experts saying?
Valuations appear mixed on REA Group shares.
Last month, Tom Fairchild from Lazarus Capital Partners had a buy rating on this ASX 200 communications share.
At the time, REA Group shares were trading at almost $180.
15 analyst ratings via TradingView have an average 12-month price target of almost $200 on REA Group shares.
This indicates a 40% upside from current levels.
However, it is worth noting that individual targets range from highs of $253 per share to lows of $147, underscoring the wide gap in opinions on this ASX 200 stock.
