Realogy Holdings subsidiary, Realogy Group along with a co-issuer on Jan. 6 priced an offering of senior notes due 2029 worth $600 million in aggregate principal amount. The notes carry an interest rate of 5.75%. Shares of the real estate company rose 5% at the close on Wednesday.
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The offering was raised from the previously announced $400 million to $600 million. Realogy Holdings (RLGY) expects to use $250 million out of the sale proceeds to repay a portion of the outstanding borrowings under its term loan A credit facility. The remaining net proceeds are planned to go towards the repayment of a portion of the outstanding borrowings under its term loan B credit facility.
On Dec. 18, Compass Point analyst Matthew Gaudioso raised the stock’s price target to $19 (29% upside potential) from $16 and reiterated a Buy rating, while selecting RLGY as his top pick.
According to Gaudioso, higher home sales volume led to “significant” cash flow for the company which should be utilised towards debt repayment.
The company is “significantly levered to a stronger housing market” with revenue driven directly by closed home sale volume, Gaudioso noted. (See RLGY stock analysis on TipRanks)
From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 1 Buy and 1 Hold. The average analyst price target of $17.50 implies upside potential of 18.7% to current levels.
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