Shares of Redfin (RDFN -1.08%) were moving higher again today after the online real estate brokerage got an upgrade from a Wall Street analyst.
It was the latest piece of good news for Redfin, which has responded favorably to expectations that interest rates will come down at the Federal Reserve's next meeting later this month.
As of 11:21 a.m. ET, the stock was up 7.8% after gaining as much as 15.8% earlier in the session.
Image source: Redfin.
Redfin's breakout continues
This morning, B. Riley upgraded Redfin from neutral to buy and raised its price target from $7.50 to $13.
Riley said the company is reporting improving fundamentals in the core brokerage business and was bullish on Redfin Next, a new program designed for recruiting more agents to its platform by allowing them to take advantage of Redfin's resources and technology and letting them keep more of their commissions.
The research firm also thinks the company is well positioned for the approaching turn in the real estate cycle as housing demand is expected to rebound as rates fall. Finally, Riley said Redfin's earnings before interest, taxes, depreciation, and amortization (EBITDA) margin should turn positive in 2025 and expand there.
The price target implies 29% upside in the stock over the next year.
Can Redfin keep gaining?
Investor momentum seems to be lining up around Redfin as interest rates look set to fall.
Like the rest of the real estate industry, the company has struggled in the current economic landscape, but Redfin has streamlined its business and narrowed its losses after several rounds of layoffs and closing its iBuying business, Redfin Now.
The company still has to prove itself, but the stock has a lot of upside potential if it can capitalize on the upcoming rebound in the housing market.
