Stock market today: Dow slides, Nasdaq closes at record to cap winning week

Stock market today: Dow slides, Nasdaq closes at record to cap winning week

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Citi analyst Ron Josey maintains his bullish call on Zillow (z) stock.

In a recent note to a client, Josey reiterated a Buy rating on the stock with a $68 price target as of last week. groundbreaking $418 million deal of the National Association of Realtors that settled lawsuits related to its commission rules.

News of this deal sent shares of Zillow and other real estate players tumbling last Friday, with investors seeing this decision as a negative for real estate agent fees and, in turn, marketing spending and revenue generation. leads on platforms like Zillow. Zillow shares fell about 1% on Friday, trading just below $51 per share.

But Josey doesn't think this development will fundamentally change Zillow's story.

“Our view here is that the deal does not cancel or eliminate buyer agent commissions. In fact, you can still move forward with that. And a seller agent can still do that, although perhaps not within the stated time frames.” MLS,” said Josey Yahoo Finance Live.

As part of its settlement last week, the NAR announced a new set of rules that prohibits agent compensation from being listed on portals like the Multiple Listing Service (MLS), where most homes sold in the U.S. are listed. But those changes won't affect Zillow's online home listing platform, according to Josey.

“We don't foresee a major disruption, at least immediately, to the overall business,” Josey said.

“Now, to be clear, [it is] It's still early… the new agreement will come into force, I believe, in mid-summer of this year. And then we'll have to see what happens.”

Other analysts, however, are not so optimistic about the impacts of this agreement.

“Historically, Zillow has sourced buying opportunities and the kind of thinking that we now [is that buying agents’] “Commissions are going to be under pressure, potentially going to zero, which is bad for Zillow,” JMP Securities analyst Nicholas Jones told Yahoo Finance in a phone interview.

According to Jones, Zillow has a market-based pricing approach: Based on how much the agent spends, the platform funnels whoever spends the most. And about 70% of lead volume tends to be buy-side engagement.

In theory, “if [buyers’ agents’] revenue goes down, well, they spend less money on advertising, right? That's the kind of debate,” Jones said.

Meanwhile, the real estate firm Compass said on Friday It reached a $57.5 million settlement to make changes to its commission practices, the first deal to be announced since the NAR settlement last week. And as the Wall Street Journal noted on Friday, several other brokerages have also settled lawsuits related to fees over the past year.

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