UPDATE: Bank of America Initiates Realogy Holdings at Buy; Housing Pure Play

Bank of America initiated coverage on Realogy Holdings

with a Buy rating and a $41 price objective. Bank of America noted, "Realogy is the franchisor for over 13,500 brokerage offices (56% of TTM EBITDA) and directly owns over 700 offices (21%). The company also offers relocation services (17%) and title and settlement services (6%). The ongoing US housing recovery combined with Realogy's franchise model should yield strong near-term operating leverage, by our estimates. We initiate coverage with a Buy rating. We base our $41 price objective on 13.5x our 2013 recurring EBITDA estimate of $727mn. Our target multiple reflects Realogy's cyclically depressed EBITDA and compares to a cycle-average 9.8x EBITDA multiple for peers." Realogy Holdings closed at $37.06 on Monday.