REA Group's (ASX:REA) recent 30% share decline presents an attractive entry point as the company maintains strong yield growth and is unlikely to be disrupted by artificial intelligence (AI), Jefferies said in a note on Feb. 6.

Jefferies noted that the company's costs remain well-controlled, with only a minor net profit after tax miss due to lower buy listings, while ongoing investments in product development and marketing position the company for steady growth without the risk of sudden disruption from AI.

The investment firm highlighted that the company's yield growth accelerated from 13% in the first quarter to around 15% in the second quarter, driven by Audience Maximiser add-on, with the planned Luxe product and AI-driven features set to further boost growth and enhance user experience in 2027.

Jefferies emphasized that the company's strong market position, valuable data assets, trusted brand, and loyal agent network are likely to allow AI to complement its platform rather than disrupt it, supporting the company's long-term growth outlook.

The investment firm upgraded REA Group to buy from hold but lowered its price target to AU$203 from AU$225.