On Friday, BMO Capital Markets adjusted its outlook for Real Matters Inc. (TSX:REAL:CN) (OTC: RLLMF), reducing the price target to C$7.00 from the previous C$7.50. The firm maintained its Market Perform rating for the company. This decision follows the release of Real Matters' fourth-quarter results for the fiscal year 2024, which did not meet consensus expectations. The underperformance was attributed to weaker than anticipated volumes in the US Appraisal segment.
The analyst from BMO Capital provided insight into the decision, noting a reduction in the forecast for the company's EBITDA for the fiscal year 2025. Despite this downward revision, the analyst anticipates considerable growth in revenue and EBITDA for the fiscal years 2025 and 2026. This expected growth is based on the assumption of an improved rate environment, which would be beneficial for Real Matters, coupled with the company's consistent performance in increasing market share and managing costs and margins effectively.
Real Matters' current evaluation, according to BMO Capital, reflects a fair valuation when considering the firm's projections and the associated risks. The analyst specifically pointed out the potential risk of mortgage rates remaining higher for an extended period, which could impact the company's financial performance.
The company's recent fourth-quarter results, which were released earlier in the week, have led to the revised estimates and outlook. Real Matters operates primarily within the real estate sector, providing services such as property appraisals and title search services, with a significant portion of its business in the United States.
Investors and stakeholders of Real Matters Inc. will be watching closely to see how the company responds to the challenges and opportunities in the upcoming fiscal years, as forecasted by BMO Capital. The market's reaction to the revised price target and the company's strategic moves in light of the current rate environment will be of particular interest.
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