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Optimistic Buy Rating for Compass Amid Stagnant Housing Market Forecast

Optimistic Buy Rating for Compass Amid Stagnant Housing Market Forecast

Compass (COMPResearch Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Bernie McTernan from Needham reiterated a Buy rating on the stock and has a $11.00 price target.

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Bernie McTernan has given his Buy rating due to a combination of factors despite adjusting the price target for Compass’s stock. The adjustment comes after the first-quarter results and a revised macroeconomic forecast that anticipates a stagnant housing market in 2025, as opposed to the previously expected 5% growth.
Nevertheless, McTernan remains optimistic about Compass’s potential for over 20% revenue growth, driven by mergers and acquisitions and continued market share gains. He highlights the company’s focus on its three-phase marketing strategy, which appears to be effective given the strong organic growth in agent numbers. Despite the lowered estimates, McTernan sees a favorable risk-reward scenario, as Compass is achieving significant operating leverage even before any anticipated recovery in the housing market, which is expected to resume growth after a four-year pause in 2025.

McTernan covers the Consumer Cyclical sector, focusing on stocks such as DraftKings, thredUP, and eBay. According to TipRanks, McTernan has an average return of 3.3% and a 48.62% success rate on recommended stocks.

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