Celebrations may be in order for Realogy Holdings Corp. (NYSE:RLGY) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
After this upgrade, Realogy Holdings' four analysts are now forecasting revenues of US$7.3b in 2021. This would be a notable 18% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$6.6b in 2021. It looks like there's been a clear increase in optimism around Realogy Holdings, given the nice increase in revenue forecasts.
See our latest analysis for Realogy Holdings
We'd point out that there was no major changes to their price target of US$18.86, suggesting the latest estimates were not enough to shift their view on the value of the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Realogy Holdings analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$15.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Realogy Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 18% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 0.7% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 15% per year. So while Realogy Holdings' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Realogy Holdings this year. They're also forecasting for revenues to grow at about the same rate as companies in the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Realogy Holdings.