UPDATE: Morgan Stanley Reiterates On Re/Max As Strong Agent Growth Continues

In a report published Tuesday, Morgan Stanley analyst Vikram Malhotra reiterated an Overweight rating on

, but removed the $35.00 price target. In the report, Morgan Stanley noted, “Strong agent growth continued in May, up 5.5% y/y, which is flat with April's growth rate and still close to a seven-year high. May data from the National Association of Realtors (NAR) shows agents in the US grew by 1.4% m/m to ~1.05 mn, much better than a historical 0.5% m/m increase in May. NAR agent count correlates closely with Re/Max's on a y/y basis, but there could be differences by quarter. "Agent growth (the company's main top line driver) is generally a key metric for the company's earnings. Agent growth has been strong in 2014, averaging 5.5%. We believe this bodes well for RMAX and estimate the company's US agent base to grow by 5.8% in 2Q on back of strong industry growth.” Re/Max closed on Monday at $28.54.