Real-estate tech firm Zillow had its stock upgraded by Wedbush Securities analyst Jay McCanless. In a note sent to clients, McCanless said that he expects the company to benefit from promising trends in the real estate market, which would positively reflect on its shares.
According to McCanless, the decreasing mortgage rates, which have already fallen to their lowest levels since early 2023, will provide a boost to Zillow’s brokerage business. Additionally, several other factors, like expected rate cuts by the Federal Reserve and the company’s software and services unit, should also play a significant role in future growth.
“In addition to the potentially positive catalyst of lower mortgage rates for Zillow’s core brokerage business, we see Zillow’s software and services initiatives adding to potential upside risk to our estimates,” McCanless wrote in the note.
McCanless now has an “Outperform” rating on Zillow’s stock compared to the previous “Neutral” rating while also upping his price target from $50 per share to $80 per share.
The upgrade reflected favorably on Zillow’s stock, sending it 2.5% up on Monday and giving it a slight uptick on Tuesday. At $62.81 per share, the stock is now 9.71% up year to date and at its highest since late 2021.