SunTrust's Peck Upgrades Zillow To Buy

In a report published Monday, SunTrust Robinson Humphrey analysts upgraded the rating on

from Neutral to Buy, while raising the price target from $110 to $130. Zillow is poised for robust long-term growth following the completion of its merger with

and its dominant online and mobile position. In the report SunTrust outlined six positive features that are expected to drive Zillow's growth prospects in the near future. Prominent among them are the growing use of online tools for research and searching properties and increased mobile usage. Moreover, the analysts believe that optionality around rentals, mortgages and digs are "underappreciated." The report mentioned that the merged entity results in a scale that is unmatched and is a "must buy" for agent advertisers and a "must be on" for home sellers. "We believe that as the better performing agents get more leads, conversion rate and ROIs will rise, creating significant pricing power for Z," the analysts added. "We think the margin profile is misunderstood and can approach levels >45%.," the report stated. The company is scheduled to report its earnings on May 12.