William Blair analyst Jeff Schmitt has maintained their bullish stance on FTDR stock, giving a Buy rating on February 28.
Jeff Schmitt has given his Buy rating due to a combination of factors including the potential synergies from Frontdoor’s recent acquisition deal and the company’s strategic initiatives. The management’s conservative guidance for 2025, which could lead to positive earnings surprises, also plays a significant role in this rating. The expected cost synergies from the acquisition are anticipated to reach $30 million by 2028, with potential revenue synergies offering additional upside.
Furthermore, Schmitt notes that the company’s earnings per share are expected to remain robust due to strategic pricing actions, the monetization of their contractor network, and share buybacks. These factors are expected to sustain the company until 2026, when the housing market conditions might improve. Additionally, the recent decline in stock price seems excessive, as it currently trades at a lower multiple compared to its historical average, presenting a potential buying opportunity.
In another report released on February 28, J.P. Morgan also maintained a Buy rating on the stock with a $58.00 price target.