CoreLogic Boosts Guidance On Strong Housing Demand; Stock Up 80% YTD

CoreLogic raised its full-year 2020 and 2021 guidance as the provider of property insights and solutions sees strength in property tax processing, insurance & spatial and international businesses as well as continued strong housing market fundamentals.

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The company now expects revenue and adjusted EBITDA to exceed the high end of its previously issued guidance ranges, with operating leverage and cost productivity expected to drive adjusted EBITDA margin above 38%. CoreLogic (CLGX) expects at least 6% organic revenue growth in 2020. It now anticipates revenue of $1.62-$1.63 billion and adjusted EPS of $4.15-$4.25 in 2020, which is higher than the upper end of previous guidance of revenue of $1.575 billion and adjusted EPS of $3.65.

Also, based on strong housing market demand and with the expectation of organic revenue growth consistent with 2020 levels, CoreLogic now expects 2021 revenue of $1.64-$1.675 billion and adjusted EPS of $4.40-$4.65. The company had earlier predicted revenue of $1.585-$1.63 billion and adjusted EPS of $4.00-$4.20 for 2021. (See CLGX stock analysis on TipRanks)

Finally, CoreLogic stated that it continues to pursue the previously announced strategic review of its business, including a potential sale of the company, for which final bids are expected in early 2021.

Earlier this month, Truist Financial analyst Andrew Jeffrey downgraded CoreLogic to Hold from Buy and kept the price target unchanged at $80. The analyst stated that he has been bullish on the stock since Senator Investment and Cannae Holdings launched a hostile takeover of the company last June.

However, Jeffrey recommended that investors should step to the sidelines given the year-to-date rally. Jeffrey added that a potential sale could yield $85 per share at his estimated 13-times expected 2022 EBITDA multiple. However, if a deal does not materialize, Jeffrey feels that CoreLogic could trade closer to its historical 10-times forward EBITDA multiple, suggesting risk to the current levels.

The Street is also sidelined on the stock, with the Hold analyst consensus based on 4 unanimous Holds. Shares have risen about 80% year-to-date. The average price target of $74 suggests a possible downside of 5.7% over the coming year.