Realogy’s stock market troubles aren’t over just yet, according to a report released Tuesday by investment research firm Zacks. The firm downgraded Realogy’s status from “hold” to “sell,” after the real estate holding company’s stock value reached a new low of $4.52 per share.
Zack’s isn’t alone in their assessment of Realogy, which controls the own-side brokerage NRT plus franchise brands including Coldwell Banker, Century 21 and Better Homes and Gardens Real Estate. Stephens and Barclays downgraded their assessment of the company by lowering their target price to $8 and $5, respectively.
Despite being downgraded by three of the nation’s eight largest firms, Realogy maintained an average rating of “hold” with a consensus target price of $11.29, according to a stock market report by Mayfield Recorder.
This is the latest descent in what has been a rollercoaster year for Realogy in terms of its stock market value. The first major drop happened in July after Realogy filed a lawsuit against Compass for alleged “unfair business practices and illegal schemes” that included a proposed price-fixing agreement and illegally accessing Realogy’s computer systems.
The company’s stock dropped to $5.87 per share as analysts noted the lawsuit made the residential brokerage business look like “the Wild West” as the largest companies fight to keep their market share — and then some.
“For the past several years, Compass has been in an aggressive expansion mode that when combined with other residential brokers in key major metros in the U.S. has resulted in market share losses and lower profitability for Realogy,” read a note published by JP Morgan.
“For those of us in the securities industry that is highly regulated when it comes to [intellectual property], [Compass’ actions] makes the residential brokerage business look like the Wild West – probably not a good thing.”
Realogy didn’t stay down for long with their stock market value rebounding after announcing the launch of TurnKey, a home-buying platform hosted on Amazon’s website that instantly connected buyers with a Realogy-affiliated agent. Soon after the July 23 announcement, Realogy’s stock value increased 23.79 percent to $6.40 — a welcome rebound, but far from the previous year’s daily trading average of $23.
But, the real estate holding company has struggled to ride the momentum created by the Amazon announcement, with their stock value taking another tumble on Aug. 29 when they discontinued their military relocation services program with the United States Automobile Association (USAA) in favor of a new, in-house program.
That day, Realogy’s stock dropped roughly 23 percent to $4.70 per share, and it has failed to bounce back with shares trading in the $4.50 range on Sept. 3.
Despite the ups-and-downs Realogy leadership and investors don’t seem to be shaken.
In their second quarter earnings call, Realogy president and CEO Ryan Schneider said he was confident in the company’s current strategy, and plans to continue creating “new products, new partnerships and new technology and data offerings.”
Likewise, some of Realogy’s largest investors have increased their stakes, signaling their confidence in the long-term outlook for the company. BlackRock Inc. increased its position in shares of Realogy by 65.8 percent during Q2 2019, representing an additional 7,225,274 shares.
Dimensional Fund Advisors LP, Clearbridge Investments LLC, Morgan Stanley and Prudential Financial Inc. also grew their positions in the company.