Bernstein analysts upgraded Zillow Group (NASDAQ:ZG) shares to Market-Perform from Underperform. The price target is lifted by $10 to $45 per share.
The rating change comes after Bernstein initiated research coverage on ZG last May as analysts were worried about the negative revision risk to both profit and revenue figures.
“Estimates have been cut substantially since then. 2023 Street revenue forecasts are down -36% and adj. EBITDA forecasts down -66% since YE21. We now find ourselves more in-line with consensus, even after further lowering numbers today,” the analysts said in a client note.
As a result, they are more positive on ZG shares as comps are easing up while the core business units “may have already bottomed, which leaves room to be optimistic.
For the analysts to become Outperform-rated on ZG shares, they would like to gain more visibility on the shape of the recovery curve while revenue outlook “is not entirely de-risked nor is the stock all that cheap.”
“As such, we fall short of making the Outperform case at this point in time,” they concluded.
Zillow shares are up almost 2% in premarket Monday.