Keefe upgrades Offerpad to Market Perform after 64% selloff in 2024

Keefe Bruyette upgraded Offerpad Solutions to Market Perform from Underperform with a price target of $3.75, down from $6. The company’s Q2 missed expectations driven by lower home sales and gross margins, and the Q3 outlook was also below estimates, the analyst tells investors in a research note. The firm says that in light of volatile housing conditions, Offerpad is further curtailing cash offers volume in return for wider margins, but is optimistic for future growth pending a return to a buyer’s market. Keefe continues to believe the company will ultimately need to access more capital to scale, but upgraded the shares driven by a more balanced risk/reward following the stock’s 64% year-to-date decline, and considering the prospect for an improving housing backdrop with lower rates.