UBS thinks investors have yet to appreciate the full benefits of Compass ‘ recently closed acquisition. The bank upgraded shares of the residential real estate broker to a buy rating from neutral. Analyst Chris Kuntarich simultaneously lifted his price target to $11 from $7. The revised price objective is approximately 49% above Monday’s close. Kuntarich highlighted Compass’ recently announced acquisition of Christie’s International Real Estate’s @properties for $444 million. “While the upside in large part reflects ests not fully incorporating the contribution of the Christie’s acquisition, COMP’s execution track record on organic growth and cost containment still strikes us as underappreciated,” he wrote. “Christie’s represents COMP’s entry into the franchise model (30-35% margins) and also comes with strong tech and brand equity. Bottom-line we believe COMP will deliver on the $30M of acquisition synergies, and possibly more, as well as move closer to delivering 30% market share in their top 30 markets.” Compass’ stock could further benefit from the company’s launch of its Compass One platform. Kuntarich described this as a “one-stop-shop portal for home buyers/sellers” that should serve to further drive referrals and strengthen relationships between agents and clients. The analyst pointed to other tailwinds that could future drive Compass’ organic market share gains. “While the 4Q EPS call on [Feb. 18] should clean up street estimates, we see scope for other catalysts — asymmetric upside from a potentially favorable Clear Cooperation Policy decision, accelerated home purchase activity in LA post wildfires (~3% of GTV), upside to the $30M of acquisition related cost savings over the next 3-years and the potential for Existing Home Sales trends to accelerate in 2H25 and FY26,” he added. The stock popped 5% after the upgrade. Analysts are split on the stock, however. LSEG data shows that three analysts rate Compass a buy or strong buy, while another five have a hold rating on it.
