Citi recommends buying Zillow on selloff, says fundamentals intact

Citi analyst Ronald Josey believes the National Association of Realtors’ $418M settlement that decouples buyer and seller agent commissions removes an overhang across the industry and does not eliminate buy-side commissions. It remains early and the new rules do not go into effect until mid-July, but sellers’ agents can still offer buyers’ agent commissions, just not through the multiple listing service, the analyst tells investors in a research note. Citi acknowledges the potential impact to Zillow’s Premier Agent business, but says Zillow has been culling its PA base over the last several years as it launches Enhanced Markets. With shares down 15% since the settlement, the firm would take advantage of the “dislocation” and reiterates a Buy rating on the stock with a $68 price target. It believes Zillow’s fundamentals are intact.