Market Overview

William Blair Downgrades CoreLogic, But Sees Two Upside Opportunities

William Blair Downgrades CoreLogic, But Sees Two Upside Opportunities
Related CLGX
Here's How Decentralization Is Changing Every Part Of The Real Estate Industry
CoreLogic's Earnings Outlook

Property data, information, analytics and services provider Corelogic Inc (NYSE: CLGX) could see its shares slacken in the near-to-medium-term, given its valuation, according to a William Blair note issued Tuesday. 

The Analyst

William Blair analyst Brandon Dobell issued the downgrade note.

The Rating

William Blair downgraded shares of CoreLogic from Outperform to Market Perform.

The Thesis

CoreLogic is likely to benefit from solid execution relative to guidance and a gradual increase in growth rate, as mortgage market comparisons get easier through 2018 and Valuation Solutions Group volumes recover, Dobell said. (See Dobell's track record here.) 

The analyst lowered his revenue, EBITDA and adjusted EPS estimates for 2018 on the basis of mortgage market expectations, expense and interest trneds and a higher correlation between VSG and mortgage unit trends. 

See also: Is 2017 A Good Time To Buy A Home?

CoreLogic stock's current valuation, at 12 times William Blair's new 2018 adjusted EBITDA estimate, has tilted the risk/reward more negatively than the other stocks in its coverage universe, Dobell said. 

"With the multiple at an all-time high and recovery expectations built into revenue growth estimates, we see more upside in other companies in our coverage over the next 12 months." 

Two scenarios under which CoreLogic could continue to outperform are: 1) if investor expectations for the VSG/mortgage-related profit growth are lower than William Blair projections and 2) if the mortgage market normalizes in 2018.

Normalization of the mortgage market will reduce earnings volatility and lead to a modest acceleration in growth, Dobell said. 

The Price Action

CoreLogic shares were down 1.41 percent at $46.12 at last check. The stock is up about 25 percent in the year-to-date period, although it has pulled back slightly since mid-October.

Related Link:

Corelogic Acquires Complete Ownership Of RELS, Notes Purchase Is 'Logical Next Step' In Expanding Offerings 

Latest Ratings for CLGX

Jul 2018PiperJaffrayMaintainsNeutralNeutral
Jun 2018Wells FargoMaintainsOutperformOutperform
Apr 2018Compass PointUpgradesSellNeutral

View More Analyst Ratings for CLGX
View the Latest Analyst Ratings

Posted-In: Brandon Dobell COreLOgic William BlairAnalyst Color Downgrades Analyst Ratings Best of Benzinga


Related Articles (CLGX)

View Comments and Join the Discussion!

Latest Ratings

AAPLWedbushInitiates Coverage On310.0
DHTJP MorganUpgrades0.0
DXCMGoldman SachsUpgrades125.0
ORLYJP MorganUpgrades398.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Australia ETFs In Focus On Record Highs

4 Top Myths Surrounding VA Loans