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In a report published Thursday, Brean Capital analyst Fawne Jiang reiterated a Buy rating on
E-House (China) Holdings Limited, but lowered the price target from $20.00 to $16.00.
In the report, Brean Capital noted, “E-House reported weak 3Q14 results, with revenue and earnings missing consensus estimates. This largely reflected the market's slowdown (despite the lifting of restrictions city by city since June) and seasonality over the summer, ensuing deterioration in primary brokerage services and listing services, muted developer activity (impacting land sales and marketing spending), and increased spending on new business initiatives. Given the weak quarter and continued weaker-than-anticipated overall market activity, expected miss of listing services targets for the year, partially offset by the pickup in transaction volumes beginning in October, management revised their full year 2014 revenue guidance downwards from 24%-27% YoY to 19%-22% YoY. Given the prolonged market weakness, the decline in the broader market has begun to impact E-House more markedly. That said, we remain positive on 1) the company's fundamental value proposition and performance amid the challenging market, 2) its execution and leadership in ecommerce services, and 3) position to benefit longer term from market improvements (following the easing of mortgage restrictions in the fall). As such, we maintain our Buy rating but lower our target price to $16 from $20.”
E-House (China) Holdings Limited closed on Wednesday at $8.52.
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